The government is open to extending the deadline for availing benefits under the proposed EV policy if Elon Musk’s Tesla expresses interest in applying. Government sources told TNIE that the new electric vehicle (EV) policy guidelines will be notified by March 15.
Under the EV policy, once the guidelines are notified, a 120-day window will be provided for original equipment manufacturers (OEMs) to apply for the scheme.
If some carmakers are unable to apply within the stipulated timeframe, the government is willing to extend the deadline. Notably, Tesla has not participated in any of the three stakeholder consultations on the EV policy so far.
However, a recent job advertisement by Tesla—following Musk’s meeting with Prime Minister Narendra Modi during the latter's visit to the United States last week—has reignited speculation that Tesla may finally apply for the EV policy.
Sources told TNIE that the US-based electric carmaker plans to open its first outlet in Mumbai in the coming months, followed by another in New Delhi.
In its initial phase, Tesla is expected to import its affordable models from Germany to test the Indian market before committing to an investment. The company will reportedly avoid importing cars from China for the Indian market.
While Tesla’s entry into India now appears certain, its investment plans remain unclear. This uncertainty is underscored by Musk’s pro-America stance and US President Donald Trump’s remark that if Tesla establishes a manufacturing plant in India to bypass the country’s high tariffs, it would be "unfair" to the United States.
So far, Musk has not made any formal commitments regarding Tesla’s India plans.
Sources also confirmed that without a concrete investment commitment, Tesla will not be granted tax concessions in India. As a result, the prices of its affordable models—Model 3 and Model Y—will remain significantly higher than in other markets due to India’s high import duties of up to 100% on completely built-up (CBU) cars.
Under the new EV policy, CBU electric cars with a minimum cost, insurance, and freight (CIF) value of $35,000 can now be imported at a reduced duty of 15% for five years. Currently, CBU vehicles priced above $40,000 face a 100% duty, while those below $40,000 are subject to a 70% tax.
Meanwhile, sources told TNIE that some OEMs have requested exemptions under the scheme. At present, the policy mandates 50% domestic value addition (DVA) by the end of the fifth year. Some manufacturers have urged the government to reduce this requirement to 25%. Additionally, some players have asked the government to replace the rule requiring an investment commitment backed by a bank guarantee with a corporate guarantee instead.