Trump warns Elon Musk building a Tesla factory in India would be ‘very unfair’ to his administration

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• Building cars in India, the world's third-largest car market, foreign brands only account for about a third of total demand—and electric vehicle sales are still relatively small, reaching around 100,000 vehicles last year.

President Donald Trump warned Elon Musk that he wouldn't take kindly to seeing one of his administration's top advisors opening a manufacturing facility in India.

Tesla is expected to enter the market in April, offering vehicles that were manufactured in Germany and shipped to the area.

Elon Musk has not yet established a presence in India. With only around 100,000 electric vehicles sold last year, the demand for high-tech cars like Tesla isn't nearly substantial enough to justify local manufacturing and the high tariffs that can more than double the cost of a luxury-priced vehicle.

. “It’s very unfair.”

request for comment.

Cars sold last year, only the United States and China have larger numbers.

Sales showrooms are currently being established in Delhi and Mumbai, the two cities that serve as the country's political and financial hubs.

Tesla's growth comes to a complete stop.

A large-scale Tesla factory seems unlikely, a scenario that has been the case for nearly two years since Musk mentioned the need to expand Tesla's production network.

In March 2023, Tesla announced at its investor day that it would start building a factory in Mexico soon and was likely to name a second new location by the end of the year. With speculation focusing on India, government officials from Delhi held secret talks to finalize the terms of a local investment.

With Modi, it was a deal that could have been sealed.

It would come with a lot of issues.

India's drawbacks

Traditionally, the Indian market has proven to be a challenging one for Western automakers. One reason is that it is largely controlled by local brands, with industry leader Maruti holding over 40% of the market share and now being majority-owned by Japan's Suzuki Motors. Foreign brands must compete for the remaining third of the market that is not dominated by domestic carmakers.

The chairman of the company behind the Mahindra XUV 400 electric offroader, said, "But we're still around."

Demand also heavily favors small, low-cost cars such as the Tata Punch, which comes with a basic minimum of in-car technology, comfort features, and safety features. Passenger-side airbags only became standard just three years ago, due to a government mandate.

In rural areas outside major cities such as Delhi and Mumbai, the poor road conditions, along with high import taxes and other trade barriers, play a significant role. Consequently, luxury brands like Mercedes-Benz and BMW sold less than 20,000 new vehicles in India last year.

“They have the highest tariffs of almost anywhere in the world.”

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