In a significant development for India’s electric vehicle (EV) ambitions, former US President Donald Trump has reportedly intervened to halt Tesla’s plans to establish a manufacturing plant in the country. The decision comes months after Trump publicly criticized the move in February 2025, calling it “unfair” to American interests. This unexpected roadblock has raised questions about India’s EV policy and Tesla’s global expansion strategy.
India’s Heavy Industries Minister HD Kumaraswamy confirmed Tesla’s withdrawal during a press conference, stating the company has “no interest in manufacturing” in India despite recent policy incentives. The government had introduced a scheme slashing import duties from 70-100% to just 15% for EV manufacturers investing $500 million in local production. While Mercedes-Benz, Volkswagen, and Hyundai have shown interest, Tesla appears to have abandoned its much-anticipated $3 billion investment plan. Industry analysts suggest Elon Musk’s recent focus on China where Tesla secured approvals for its self-driving technology and ongoing disputes over India’s import taxes influenced this reversal.
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The development marks a sharp turn from April 2024 when Musk met PM Narendra Modi and signaled strong India commitments. With Tesla now limiting its presence to two showrooms in Delhi and Mumbai, India’s dream of becoming an EV manufacturing hub faces new challenges. Meanwhile, Trump’s continued advocacy for “Made in America” manufacturing continues to reshape global corporate decisions, leaving India to court other automakers to fulfill its electric mobility ambitions.
