Ending nearly a decade of negotiations, false starts, and broken promises with the Indian government, Tesla has officially confirmed that it will not build a manufacturing facility in India. India’s Minister of Heavy Industries H.D. Kumaraswamy confirmed the decision on May 19, putting a definitive end to one of the longest-running negotiation in the global EV industry.
While Tesla wanted lower import tariffs before committing capital to a factory, India wanted a factory commitment before lowering tariffs.
India had offered a policy that would reduce import duties from 110% down to 15% on EVs priced above $35,000, provided the automaker committed at least $500 million toward local manufacturing within three years.
Mercedes-Benz, Skoda-Volkswagen, Hyundai, and Kia all showed interest in the program. Tesla however, declined to participate.
It all started in April 2024, when CEO Elon Musk abruptly canceled a planned trip to India where he was set to meet Prime Minister Narendra Modi and announce Tesla’s market entry. He went to China instead. By July 2024, Fortune reported that Tesla executives had stopped contacting Indian government officials entirely.
Tesla launched retail sales in India in July 2025 after years of negotiation. The results have been underwhelming. The automaker sold just 225 vehicles in all of 2025, and through April 2026, cumulative sales stand at approximately 383 units — far below internal expectations.
See What’s Next in Tech With the Fast Forward Newsletter
Tweets From @varindiamag
Nothing to see here - yet
When they Tweet, their Tweets will show up here.
