Does India Need Tesla Now as Much as It May Have a Few Years Ago?

• Tesla opens two official stores in India, years after various efforts to enter the country while also avoiding the massive import tariffs on foreign-made vehicles.

• Tesla CEO Elon Musk has met with Indian Prime Minister Narendra Modi a number of times regarding building a gigafactory in India, but the discussions have not resulted in a positive outcome for the country.

• Tesla now offers only the Model Y in India, assembled in China, but now lacks the attention and political will to build a full-size plant in the country of over one billion people, as India's domestic automakers catch up.

For a country with over a billion people, India has remained largely uninterested in Tesla for a long time. Or so it seemed.

Every few years we heard rumors of overtures made by Tesla's team to India's government, wanting to be the site of Tesla's future gigafactories, but after a few weeks of hopeful forward-looking political niceties nothing would materialize.

The last time India was seen as being among the finalists for a Tesla Gigafactory was in 2023, as Elon Musk teased that he was looking at a number of countries for the next site, including Canada.

But 2023 was also a very different time for Tesla and for Elon Musk, no matter how close it seems.

At the time, India's Prime Minister Narendra Modi even reported to have made a personal push for Gigafactory India, which would have given Tesla not only tremendous regional export potential, but also longer-range export potential to Europe.

In the end, nothing came of that particular effort in 2023, though India did once again pop up in mid-February of this year as CEO Elon Musk met privately with Prime Minister Modi, amid rumors of another push for a Tesla gigafactory in India.

Attractive Electric Micromobility Network

One of the reasons India has been among the finalists for Tesla's next plant is its population of 1.45 billion, and India has a very advanced electric micromobility network, making it suitable to host thousands of Tesla Supercharger sites.

Also, Tesla in 2023 was still reportedly considering a $25,000 model, which would have been a popular version for India and for regional export.

The eventual demise of that model, believed to have been felled by a number of factors including inflation, seemingly closed the door on Gigafactory India as well.

One major sticking point during all of these negotiations—at least as it concerns an official launch if not local manufacturing—was a waiver from India's very high import duties, which had effectively kept out many Tesla vehicles, even through the gray market.

Now, Tesla appears to be inching closer to an official sales launch in the country if not local manufacture—a business case that seems to have eroded relatively quickly over the past two years.

For starters, Tesla would need the money to build the factory in India, and its financial picture is seen as having steadily eroded throughout 2025.

Stores in Delhi and Mumbai?

Nevertheless, Tesla has just opened a showroom in Delhi and has leased several pieces of land in nearby cities. A Supercharger location has been built near the Delhi site as well, with more planned for neighboring cities.

Overall, Tesla reportedly plans one store in Delhi and one in Mumbai, and so far the only model on sale in the country is the Model Y, which is made in China.

It's not quite the big, official launch, but something closely resembling the arrival of a western luxury brand in China in the 1990s, and without local manufacturing presence.

The Model Y in India, therefore, is bound to be a pricey, rare, rich person's car with just a couple of official company stores located far apart—quite different from what was envisioned a few years ago. And it won't be an offering for the middle class, like it is in China or Europe.

When it comes to local manufacturing, those chances now seem lower than just two years ago when the Berlin-Brandenburg plant was at least meeting European demand.

That demand abruptly cratered due to a significant dip in Elon Musk's popularity in a number of western European countries and remains unlikely to be regained anytime soon.

Likewise, Tesla appears to be done building gigafactories in far-off foreign countries for the time being, at least barring major political changes.

More importantly, Tesla no longer appears to have the capital to devote to such a venture, nor any new (and actually affordable) models to offer India, while also facing a thin middle class not willing to spend money on anything the automaker has in its lineup at the moment.

Those major political changes may well turn out to be China's quick assimilation of the EV market in scores of developing countries in Southeast Asia and South America, both of which disfavor Tesla's regional ambitions on the Indian subcontinent.

We are also likely to see India's domestic automakers, Mahindra and Tata among them, break out of a largely domestic market and offer their own affordable and desirable EVs that can be exported—something which is already happening.

India, it appears, may not need Tesla as it did just a few years ago.

Does Tesla need new, less expensive vehicles in its lineup, beyond the Model 3 and Model Y? Let us know what you think in the comments below.