Heavy industries minister HD Kumaraswamy stated that Tesla is not keen to manufacture electric vehicles in India. “We’re not actually expecting from them. They’re planning to start with showrooms,” the Union minister said while announcing the guidelines for the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI).
- Two Tesla India showroom locations were finalised earlier
- A Tesla manufacturing plant in Maharashtra was reportedly under consideration
Scheme to Promote Manufacturing of Electric Passenger Cars in India explained
15 percent duty, 8,000 units allowed per year
Under SPMEPCI, electric passenger cars with a minimum CIF (cost, insurance and freight) value of USD 35,000 (Rs 29.92 lakh*) can be imported at a lower 15 percent duty for 5 years from the application approval date, compared to the conventional 70-100 percent import tariff rates; this benefit is capped at 8,000 units per year.
The approved OEMs will have to invest a minimum of Rs 4,150 crore (approximately USD 500 million) to set up and start a manufacturing facility in India within three years. Moreover, they must achieve 25 percent domestic value addition within three years of approval and 50 percent by the fifth year.
The applications for the scheme will open soon, with a 120-day window (or more) for submissions. Only large car manufacturers with at least Rs 10,000 crore in annual revenue and Rs 3,000 crore in global assets are eligible.
Tesla India entry plans
Showrooms in Mumbai and Delhi
When the scheme was announced in 2024, many saw it as a welcome move for Tesla, which has opposed India’s high car import duties. In fact, it was just to bring Tesla to manufacture in India that the government considered reducing tariffs.
In February 2025, Tesla reportedly finalised showroom locations in Mumbai's Bandra Kurla Complex and Delhi's Aerocity, each around 5,000 square feet. Additionally, the EV brand advertised job openings in India for sales, customer support and operations. There were also reports of Maharashtra becoming Tesla’s manufacturing hub in India.
However, even though the government has now finalised the details of its EV import policy, Tesla still remains noncommittal to manufacturing in India.
Mercedes, VW, Hyundai interested in Make in India
Volkswagen and Skoda have no EV models here
“Mercedes-Benz, Hyundai, Kia, Volkswagen, Skoda – all these companies have already shown interest formally,” Kumaraswamy added. Excluding the last two brands, the rest sell electric vehicles in India. These models include the Mercedes EQS 580, Hyundai Creta Electric and Kia EV9, which are either assembled locally from completely knocked-down kits or imported as completely built units. It remains to be seen how the prices of electric cars in India will change with the SPMEPCI guidelines.
*CONVERTED RATE AS OF JUNE 3, 1 PM IST.
Hormazd Sorabjee
Anurag Chaturvedi
