Heavy Industries minister HD Kumaraswamy stated that US’ 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 can initially be imported with a minimum CIF (cost, insurance and freight) value of $35,000 (Rs 29.92 lakh*) at a 15 percent duty rate for 5 years, compared to the conventional 70-100 percent import tariff rates. This benefit is capped at 8,000 units per year provided the OEMs make a minimum of $500 million (Rs 4,275 crore*) investment to Make in India within 3 years, achieving 25 percent domestic value addition, and increasing it to 50 percent by the fifth year.
The scheme will open for applications soon, with a 120-day window 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. However, even though the government has now finalized the details of its EV import policy, Tesla still remains non-committal to manufacturing in India.
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 has advertised job openings in India for roles in sales, customer support and operations. Given the latest developments, Tesla is unlikely to benefit from the import duty cuts. This also puts plans for Maharashtra to become Tesla’s manufacturing hub in India on hold, as previously reported.
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 latter two German car brands, the rest three do sell electric vehicles in India, including Mercedes EQS 580, Hyundai Creta Electric and Kia EV9. Notably, these EVs are either locally assembled here via the completely knocked down method or fully imported. It remains to be seen how the prices of electric cars in India will change with the SPMEPCI guidelines.
*CONVERTED RATES AS OF JUNE 3, 1 PM IST.
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