Elon Musk Eyes Indian Market: Tesla’s Next Big Move?

Elon Musk is setting his sights on India. Amid slowing global sales and political tensions, Tesla is making strategic moves to enter one of the world’s fastest-growing automotive markets. But will Musk go as far as manufacturing 'Made in India' Teslas?

Tesla’s Hiring Spree in India

Tesla has started recruiting for 13 positions in India, including customer service roles, signaling its intent to establish operations in the South Asian nation. Sources indicate that Tesla plans to begin vehicle shipments to India between July and September, starting with major cities like Mumbai, Delhi, and Bangalore.

The hiring wave comes after Musk’s February 13th meeting with Indian Prime Minister Narendra Modi in Washington, where they reportedly discussed space, technology, and innovation.

Navigating India's High Import Taxes

India’s hefty import duties—up to 70% on electric vehicles (EVs)—have long been a barrier to Tesla’s entry. Even the most affordable Tesla models, if imported from China, would likely cost over $50,000 in India. To counter this, the Indian government introduced an incentive in March 2024, offering tax exemptions for automakers that invest at least $500 million in local manufacturing.

Reports suggest Tesla is exploring a $3 billion gigafactory investment in India, with company representatives scouting potential sites.

India's Booming EV Market

With a population exceeding 1.4 billion, India has rapidly emerged as the world’s third-largest automobile market, surpassing Japan in 2022. Passenger car sales in India rose by 4% in 2024 to 4.18 million units, with EVs currently accounting for just 2% of the market. However, experts predict that EV penetration could reach 20% by 2030 as middle-class incomes rise and environmental awareness grows.

Industry analysts believe Tesla's cutting-edge technology and brand appeal could give it a competitive edge despite increasing domestic competition. “Owning a Tesla is about more than just a car—it’s about status, technology, and innovation,” said Ankur Bisen, a senior partner at consulting firm Technopak.

Political Challenges and U.S. Trade Policy

Tesla’s India entry isn’t just about business—it’s also entangled in geopolitics. Former U.S. President Donald Trump has voiced concerns about Musk investing in Indian manufacturing, calling it “unfair” to the U.S. He has threatened reciprocal tariffs if India maintains its high import duties on American goods.

Meanwhile, Tesla faces internal pressures to expand into new markets as its global sales have slowed. The company reported its first annual sales decline last year, with a 17% year-over-year drop in January.

Will Tesla Commit to 'Made in India'?

Despite mounting speculation, Tesla has yet to confirm its long-term strategy in India. Analysts believe the company’s decision will hinge on the Indian government’s final stance on tax incentives and regulatory conditions.

A final announcement from Tesla is expected soon, with speculation that the company could commit to building a facility capable of producing up to 500,000 cars annually. If that happens, it could mark a turning point for both Tesla and India's growing EV industry.

For now, all eyes are on Musk’s next move. Will Tesla adapt to India’s unique market conditions, or will high tariffs and political uncertainty derail its plans?