Tesla’s India entry faces hurdles amid Musk-Trump fallout

Tesla’s plans to establish a manufacturing base in India remain uncertain as the company shifts focus to setting up retail operations, reflecting ongoing challenges in the country’s nascent electric vehicle (EV) market. The dynamics come amid a high-profile fallout between Tesla CEO Elon Musk and US President Donald Trump, which has impacted Tesla’s global stock and investor confidence.

Earlier this week, Union Heavy Industries Minister H D Kumaraswamy confirmed that Tesla is not pursuing manufacturing in India at this time but is instead concentrating on opening retail showrooms. He noted that other global EV players such as Mercedes-Benz, Volkswagen-Škoda, Hyundai, and Kia have expressed interest in India’s flagship Scheme to Promote Manufacturing of Electric Passenger Cars, launched in March last year, Caliber.Az reports via foreign media.

The friction between Musk and Trump has hit Tesla hard, with the company’s stock price dropping nearly 15%, wiping out approximately $150 billion in market value. Tesla was already facing rising competition from rivals like China’s BYD, while global EV sales have shown signs of slowing.

An industry insider suggested the lack of political support from “the most influential American” might complicate Tesla’s India ambitions. 

“With its stock taking a beating, and a reconciliation between Musk and Trump seeming unlikely, the company could find it difficult to tell its investors why it was pursuing setting shop in a market like India, where its vehicles may not garner mass appeal due to their high cost and India’s relatively nascent EV market and infrastructure,” the executive said.

India has long witnessed a ‘will they, won’t they’ scenario regarding Tesla’s manufacturing plans. The Indian government has made significant policy moves aimed at attracting Tesla, including the introduction of incentives to boost local EV manufacturing. This was partly in response to Tesla’s complaints about steep import duties, which can reach up to 110 percent.

However, Trump expressed disapproval of Tesla’s expansion into India. In February, he criticised the move as “unfair” to the US, stating, “Now, if (Tesla CEO Elon Musk) built the factory in India, that’s okay, but that’s unfair to us. It’s very unfair.” Trump has voiced similar concerns over Apple’s expansion plans in India.

By Sabina Mammadli