Tesla has decided that it will not establish a production facility in India, instead focusing on importing despite India's priority on local manufacturing.
According to a report by Teslarati, Tesla planned to establish a production facility in India that would have enabled it to expand sales dramatically in the world's most populous country. After going back and forth with the Indian government for several years about whether the company would produce its vehicles domestically, Tesla has decided against it.
This decision is at least partially attributed to India's reduction of vehicle import duties.
Teslarati reported that of the 4.3 million vehicle purchases in India in 2024, only 2.5% were electric vehicles. By comparison, EVs made up 10.2% of U.S. vehicle sales last year.
Though Tesla sales have taken a recent downturn that is attributed in part to EV misunderstanding, coupled with Tesla CEO Elon Musk's involvement in the Department of Government Efficiency in the Trump administration — with some consumers seeing support for the Tesla brand as a political statement — EV sales, in general, have been on an upward trend.
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India is considering a reduction of import duties from 100% to just 10%, which would be significant for companies like Tesla that would like to have a greater impact on the consumer market in that country and would make the vehicles more affordable for consumers.
India's minister of heavy industries, Shri Kumaraswamy, confirmed Tesla's import plans, per Teslarati, explaining that while Tesla has plans to establish some presence in India, the company has no interest in building cars there.
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