Tesla's India Plans Hit a Snag

Despite the Indian government's push to attract electric vehicle (EV) manufacturers with its new EV policy, Tesla appears to be taking a different route. Union Minister HD Kumaraswamy stated on Monday, June 2, 2025, that Tesla is unlikely to begin manufacturing vehicles in India in the near future. Instead, the company seems primarily interested in establishing showrooms to sell imported cars.

This news comes as a surprise to some, considering the Indian government's efforts to incentivize EV production within the country. The new policy aims to lower import taxes for foreign automakers who commit to building EVs in India, with the goal of making India a global hub for EV manufacturing. Specifically, the policy offers a reduced import duty of 15% on electric vehicles priced at $35,000 or more, provided the manufacturer invests at least $500 million to establish a local factory within three years.

While other automakers like Mercedes-Benz, Volkswagen, Hyundai, and Kia have reportedly shown interest in the scheme, Tesla seems hesitant to invest in local production at this time. Industry experts suggest that high import duties have historically been a barrier for Tesla in the Indian market, making it difficult to compete on price. Although the new policy offers a way around these high taxes, Tesla may prefer to initially focus on selling imported vehicles.

Tesla has been making some progress in establishing a presence in India. The company has secured showroom locations in Mumbai and Delhi and has also been advertising job positions in the country, signaling an impending launch. However, without local manufacturing, Tesla's ability to compete with domestic players like Tata and Mahindra, who already have a strong foothold in the Indian EV market, will be limited.

Will OPEC & Russia-Ukraine War Drive Prices Up Again?

The global oil market is currently facing a complex set of pressures that could potentially lead to rising prices. The ongoing Russia-Ukraine war and OPEC's production policies are two key factors influencing the market.

The Russia-Ukraine conflict has significantly impacted the energy market. Russia is a major oil producer and exporter, and the war has created uncertainty about the stability of its oil supply. The conflict has also led to sanctions and trade restrictions, further disrupting the market. According to one study, the war and its related events caused West Texas Intermediate (WTI) crude oil prices to increase by $37.14 (a 52.33% surge) and Brent crude oil prices to rise by $41.49 (a 56.33% increase) between October 1, 2021, and August 25, 2022. During this period, the Russia-Ukraine war accounted for a substantial portion of the fluctuation in both WTI and Brent crude oil prices. Escalating tensions in the Russia-Ukraine war have contributed to broader market anxiety and a jump in oil prices, causing Wall Street to open with losses on Monday, June 2, 2025.

OPEC's decisions on oil production also play a crucial role in determining prices. OPEC+ which includes Russia, has been implementing production cuts to balance the market. However, the group has recently decided on a more modest increase in output than expected. This decision, coupled with the uncertainty surrounding the Russia-Ukraine war, has led to a rise in oil prices. U.S. benchmark crude oil gained $2.54, more than 4 per cent, to $63.33 per barrel, while Brent crude, the international standard, was up $2.34 at $65.12 per barrel on June 2, 2025.

President Trump has previously stated that asking OPEC to lower oil prices would immediately end Russia's war in Ukraine by depleting Russia's revenue.

It is important to note that oil prices are influenced by a variety of factors, including supply and demand, political tensions, and economic conditions. The situation in Ukraine and OPEC's production policies are just two of the many factors that could contribute to rising prices in the near future.