Elon Musk’s India pitstop: ‘Make in India’ is off the cards for now, but are Teslas going to be at least made for India?
Elon Musk’s visit to India sparked excitement across the tech and auto sectors. Many expected him to announce Tesla’s manufacturing plans in India. Instead, the reality is more restrained. Tesla is entering the Indian market — but not through local production, at least for now.
Tesla Opens Its Doors in Mumbai
Tesla marked its official Indian entry by launching its first showroom in Mumbai’s Bandra-Kurla Complex. The Model Y, Tesla’s mid-size electric SUV, is the first offering for Indian buyers. This vehicle, imported from China, will be available for booking soon, with deliveries expected in 2025.
The Model Y doesn’t come cheap. Due to high import duties, the starting price stands at around ₹60–70 lakh (roughly $70,000 USD). This clearly places Tesla in India’s luxury segment.
No Manufacturing Plans for Now
Before Musk’s visit, many speculated that Tesla would build a plant in India. The government even introduced new policies to encourage such investment. States like Gujarat and Maharashtra welcomed Tesla with open arms. Despite these efforts, Tesla has chosen not to manufacture locally at this stage.
Union Minister H.D. Kumaraswamy confirmed the news. Tesla will begin its India journey by selling imported cars and setting up retail and service centers.
Why Tesla Isn’t Manufacturing in India Yet
Several factors explain Tesla’s decision to delay local production:
- High Import Tariffs
India’s duties on imported vehicles are among the highest globally. Tesla has lobbied for lower tariffs before committing to local factories. - Uncertain Demand
While India’s EV market is growing, it’s still in early stages. The luxury EV segment is even smaller. Tesla may be cautious about heavy investment without clear demand. - Underdeveloped Infrastructure
India’s EV ecosystem — including charging stations and part suppliers — is still growing. Tesla prefers well-established support systems before full entry. - High Investment Threshold
Setting up a Gigafactory requires at least $500 million. Tesla likely wants stronger policy guarantees and better cost-recovery before making such a move.
Teslas for India, If Not Made in India
Though Tesla won’t build cars in India yet, it’s taking steps to tailor its offerings for Indian customers.
- Right-Hand Drive Vehicles
Tesla is customizing its Model Y to suit India’s right-hand drive requirement. - Road Testing in Indian Conditions
Tesla has conducted tests across Indian cities. These trials help adapt suspension, tires, and electronics for India’s diverse roads and climates. - Local Component Sourcing
Tesla has increased sourcing from Indian suppliers. The company plans to buy up to $15 billion in parts from Indian firms over five years. While this doesn’t equal full production, it shows growing engagement with local industry.
What Indian Buyers Can Expect
Right now, Tesla’s Model Y is a luxury product in India. It will mostly attract wealthy buyers — businesspeople, celebrities, and early adopters. For most Indians, brands like Tata, Mahindra, and BYD offer more affordable EV options.
Still, Tesla’s entry is significant. Its presence could push Indian automakers to innovate faster. The pressure to match Tesla’s tech, design, and service might lead to better EVs across the board.
Will Tesla Build in India Later?
It’s possible. Tesla’s strategy often involves entering new markets with imports, then expanding locally once demand justifies the investment. That’s how the company approached China — a market where it now runs a major Gigafactory.
Several things need to happen before Tesla opens a plant in India:
- EV demand must grow steadily
- The government must reduce import duties or offer stronger production incentives
- Tesla must see a clear path to profits from Indian operations
Deputy Chief Minister Devendra Fadnavis recently urged Tesla to consider setting up in Maharashtra. He stated that India isn’t just a consumer base — it’s a potential EV manufacturing hub.
A Strategic but Cautious Approach
Elon Musk’s visit shows that India is on Tesla’s radar. However, the company is moving cautiously. Instead of bold factory announcements, Tesla is starting small — importing vehicles, studying the market, and expanding supplier ties.
India offers Tesla an exciting opportunity, but also presents challenges. Regulatory hurdles, pricing sensitivity, and infrastructure gaps make it a complex market to crack. Musk knows this — and appears to be playing the long game.
Conclusion
Tesla has finally arrived in India, but not in the way many hoped. The company is not building its cars here, and won’t for the foreseeable future. However, it’s still working to create Teslas that fit Indian roads and preferences. The Model Y launch marks just the beginning of this journey.
If demand grows and government policies align, Tesla may eventually manufacture in India. Until then, Indian EV enthusiasts can expect a limited yet symbolic presence from one of the world’s most talked-about carmakers.
