Extending incentives to sustain electric vehicle investments, the government may give Tesla more time as EV adoption slows.
The Indian government is considering extending the deadline for its flagship electric vehicle (EV) manufacturing incentive scheme, popularly referred to as the ‘Tesla scheme’, after global automakers showed limited interest. The move aims to attract major players such as Tesla to set up production in India and boost the country’s lagging EV adoption.
Announced in June, the policy allows global manufacturers investing at least $500 million in local EV production to import up to 8,000 fully built units per year at a reduced customs duty of 15%, down from the standard 35%, for up to five years. However, with the investment window set to close on 21 October, no major commitments have yet been made.
Companies including Mercedes-Benz, Kia, Hyundai, and Skoda-Volkswagen have expressed interest but are yet to formalise plans. Tesla, meanwhile, remains absent, preferring to sell imported units through its retail stores in Mumbai and New Delhi.
Despite the tepid response, officials suggest India remains a promising EV destination, supported by policy stability and a growing consumer base. Analysts note that the scheme’s extension could reignite interest, particularly as automakers assess the viability of local manufacturing amid global EV market headwinds.
The Ministry of Heavy Industries is expected to make a final decision on the scheme’s extension closer to the current deadline.
