Why Indian Car Companies Should Be Terrified of Tesla’s Arrival?

The question isn’t just why Indian car companies should fear Tesla — it’s why they should be shaking in their boots. With Elon Musk making bold moves in the global automotive market, it’s clear that Tesla isn’t just a car company; it’s a force that could reshape the entire landscape of the Indian automotive industry. Indian companies need to understand one thing: they’re not just competing with Tesla’s cars—they’re competing with Musk himself.

The Shadow of Elon Musk: More than Just a Business Tycoon

After Donald Trump’s victory in the United States, Elon Musk didn’t just remain an industrialist—he became a symbol of power and influence. Musk’s reach has extended far beyond boardrooms, becoming an essential player in shaping both economic and political narratives. It’s no longer just about electric vehicles or technology; Musk has woven himself into the fabric of global politics. When India announced its revamped electric vehicle policy in early 2025, which slashed import duties from 110% to 15% for cars manufactured or assembled in India, the stage was set for Musk’s imminent entry into the market. And while Musk pulled out at the last minute due to “urgent business,” the storm surrounding Tesla’s arrival had already started brewing.

The Bigger Picture: Musk’s Plans Go Beyond Cars

Elon Musk isn’t just eyeing India’s car market—he’s targeting the entire telecommunications infrastructure. Through Starlink, Musk is positioning himself to dominate the internet connectivity sector, as well. If the government is ready to relax regulations to accommodate Tesla, there’s no doubt they could do the same for Starlink. The implications are enormous. The question that needs to be asked is: will the Modi government allow Musk to make his own rules and drive away local competitors in more than just the automotive sector? Or will they protect domestic industries from his unprecedented influence?

The Government’s Hypocrisy: Why Was the Import Duty Even There?

The government needs to be grilled on the real reason behind the initially excessive 110% import duty. What was the original purpose? Why did they suddenly reverse course and slash it to a meagre 15%? What changed in the political and economic landscape to allow such an about-face? If Tesla doesn’t plan to establish a manufacturing unit in India anytime soon, why should it receive such preferential treatment? In the world of business, favouritism isn’t just rare—it’s dangerous.

Tesla's Global Manufacturing Strategy: What Does India Have to Offer?

Currently, Tesla operates its Gigafactories outside of the United States in just three countries—China, Germany, and Mexico. So, why should Musk be interested in setting up shop in India? The truth is, there’s no urgent need for a Tesla manufacturing plant in India, not yet anyway. According to reports, Tesla is initially going to import vehicles from its Berlin plant, not build them in India. The idea that cars made in China might enter the market was quickly debunked when Tesla confirmed that the imports would only come from Berlin. So, what’s the real play here?

Government's Mysterious Role in Musk’s Influence

While a $21 million USAID fund from the U.S. is raising red flags about American interference in India’s internal affairs, the far more significant issue is the subtle but powerful influence Musk is wielding. Despite allegations of foreign intervention, nobody questions why Tesla is being given special treatment with policies that benefit them. Should the Modi government really be bending over backward for a company that has yet to set up manufacturing in India? Will Musk get to enjoy a 15% import duty before even laying down a single brick of a factory?

The Unseen Impact on Indian Employment

Despite the reduction in duties, Tesla’s hiring practices in India are shockingly minimal. The company recently posted just 13 job openings in India: 12 full-time roles and one part-time position. These positions, mainly in customer service, maintenance, and sales, are hardly a justification for such sweeping policy changes. How is the Indian government planning to ensure that Tesla’s entry into the market translates into real job opportunities for Indian citizens? The lack of local hiring in an industry that could be booming with the right policies is a glaring issue that cannot be ignored.

The Quiet Reduction in Import Duties: Will Tesla Get the Same Treatment?

Let’s not forget the precedent set by the quiet reduction in the import duty for Harley-Davidson from 50% to 30% back in 2024. This change was barely reported, yet it set the stage for more concessions that could disproportionately benefit foreign players. Is India gearing up for more covert changes to make Tesla’s entry smoother while disregarding the local market’s needs? The government’s track record shows a worrying trend of favouring foreign entities with little transparency.

Modi and Musk: The Political Favours at Play

Prime Minister Modi’s meeting with Musk in the United States in 2023 has only fuelled speculation about the government’s deepening relationship with the billionaire. In fact, a recent photo of Musk in India with the External Affairs Minister and National Security Advisor raised eyebrows about the increasingly cozy political ties between the two. If you’re a fan of such optics, be warned: they might be hiding a more troubling reality—one that might not serve the interests of Indian industries.

The Contradiction in Government’s Stance on Local Manufacturing

Transport Minister Nitin Gadkari’s earlier statement that India should dominate the global electric vehicle market was meant to show confidence in local capabilities. However, his request for Musk to avoid importing cars from China and instead manufacture them in India for a “win-win” situation now feels hollow. Reports now suggest that Tesla plans to import cars from Berlin instead, leaving a trail of broken promises and contradictions. Was this a strategic misstep, or is the government’s pro-Musk stance driven by political calculations rather than economic sense?

Why Indian Car Companies Need to Wake Up

If Indian car manufacturers genuinely have the technology and capabilities to compete with global giants, why did their stock prices plummet when Tesla’s entry was confirmed? The market is clearly signalling its doubts: the government’s tilt towards Musk could put Indian companies at an irreversible disadvantage. And it’s not just about the electric vehicle sector—this is a test of whether India will bend its policies to suit Musk’s desires, sacrificing the growth of its domestic industries in the process.

The Real Threat: Tesla’s Disruption or Indian Cars’ Inferiority?

Electric vehicles are undoubtedly the future, and Indian manufacturers should embrace the competition—if they can keep up. But if their vehicles are subpar, they will falter regardless of what Tesla does. In a country where car ownership is still under 8%, the entry of Tesla could either stimulate a surge in electric vehicle adoption or expose the fact that local companies are lagging far behind. India’s roads may be congested, but the demand for innovative cars is rising, and if Indian companies can’t deliver, they’ll be left in the dust.

The Million-Dollar Question: Will India Change Its Laws for Musk?

The real question Indian businesses should be asking is simple: will the government bow to Musk’s demands and change policies to favour Tesla’s arrival? If the answer is yes, we could witness a drastic shift in the way industries are treated in India. The future of the Indian automotive sector is on the line, and it’s up to the government to decide whether it wants to secure a level playing field or allow Musk to set the rules for everyone else. The stakes have never been higher.?