Tesla has initiated the process of identifying land for an electric vehicle (EV) manufacturing facility in India, with Maharashtra emerging as the frontrunner. The company is also reportedly in talks with Tata Motors for a possible collaboration. The move follows Tesla CEO Elon Musk’s meeting with Prime Minister Narendra Modi in the United States, as the automaker seeks policy incentives, including lower import duties on EVs, to facilitate its entry into the Indian market.
Maharashtra holds strategic importance for Tesla due to its existing presence in Pune, where the company has an office and several suppliers. State officials have suggested potential sites in Chakan and Chikhali—both major automotive hubs that host manufacturers like Mercedes-Benz, Tata Motors, Mahindra & Mahindra, Volkswagen, and Bajaj Auto.
Logistics play a crucial role in Tesla’s decision-making process, and proximity to a port is a key criterion for the final site selection. Despite Maharashtra's strong positioning, competition remains fierce. The state has previously lost high-profile projects like the Vedanta-Foxconn semiconductor plant and the Tata-Airbus aircraft project to other regions. Tesla is still evaluating multiple factors before confirming its location.
Tesla has reinforced its commitment to India by advertising job openings for 13 positions across vehicle service, sales, customer support, operations, and business development. These roles, based in Mumbai and Delhi, indicate that the company may soon launch showrooms in India.
Additionally, Tesla has reportedly reached out to executives at Tata Motors, one of India’s leading EV manufacturers, to explore potential collaboration. The report suggests that Prashanth Menon, who previously led Tesla’s India operations before relocating to the Netherlands in 2022, is expected to play a crucial role in shaping the company’s India strategy upon his return.
Tesla’s entry into India has been in discussion for years. In 2021, the company had finalized plans to open a showroom and office in Mumbai’s Lower Parel but withdrew due to high import duties. Tesla had proposed reducing tariffs on fully assembled EVs priced under $40,000 from 60% to 40% while committing to local manufacturing if market demand was strong. However, the Indian government declined the request at the time.
In 2023, Tesla engaged with Modi’s administration on the topic of local component sourcing and later leased office space in Pune. The government’s updated EV policy in 2024 now offers duty relief to manufacturers at any investment above US$500 million, making India a more attractive destination for Tesla. In April 2024, Musk was expected to announce an investment during his visit to India but cancelled it owing to his pressing business and swapped the visit to China.
As India’s EV market is expanding at a rapid clip and the policy is also changing, Tesla shows no intention to come to India without a manufacturing base. But talks with states and business feasibility will determine the final line. If Tesla gets its Maharashtra plan in motion, it would be a major first for consolidating India in the fold of geographies to reckon with for the global EV economy.