Tesla India entry: India may introduce an on-tap facility process for electric vehicle manufacturing under the soon to be unveiled guidelines of the incentive programme announced in the previous year, according to officials. The detailed regulations are anticipated next month, with an extended application period being considered.
According to an ET report, this arrangement would enable international EV manufacturers like Elon Musk’s Tesla to evaluate the Indian market prior to committing investments. The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SMEC), introduced in March 2024, awaits implementation. A senior government official informed the financial daily that the SMEC guidelines would be completed within two weeks and released next month.
Tesla, under Elon Musk’s leadership, is reportedly seeking retail space and recruiting staff to sell vehicles in India.
Clearing the path for EVs
The company has not yet committed to local manufacturing plans.
An official indicated that the application period for SMEC incentives could extend to 120 days or longer, with possible multiple application windows. “The window can also be opened multiple times. So an EV maker can test the market right now and then apply for manufacturing incentives at a later stage,” the official added.
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The scheme would enable Tesla to evaluate Indian market demand before investing in manufacturing facilities. Additionally, the programme will consider investments in EV assembly lines within existing factory premises eligible for incentives, benefiting global automotive companies already present in India. The government anticipates receiving applications for EV manufacturing unit incentives following the guidelines’ announcement next month.
India launched SMEC on March 15, 2024, to stimulate domestic electric car manufacturing investment. Under the scheme, companies investing a minimum of $500 million in local manufacturing can import fully built electric cars valued at $35,000 or more at 15% import duty for five years.
Previously, interested automakers expressed concerns regarding the investment requirements for dedicated EV facilities.
