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Tesla’s ‘challenges’ with India gov’t halt potential rescue of $27B manufacturing initiative
In 2014 when Narendra Modi officially became Prime Minister of India, his first message to people around the world was that, under his leadership, Indian manufacturing operations would become one of the world’s most robust. In September of the same year, Modi officially launched “Make In India,” a government initiative that encouraged companies from all corners of the globe to develop, produce, and assemble products in India with sizeable investments into manufacturing.
Five years after the initiative began, India’s manufacturing GDP was the lowest it had been in twenty years. It dropped 1.2% in the first five years following the launch of Make In India, although the growth rate of manufacturing globally increased 6.9% from 2014-15 to 2019-20.
Seven-and-a-half years later, Make In India is still a work in progress.
It was a disappointing start to the still active program, which has not been a complete failure. General Motors brought a $1 billion investment to a manufacturing facility in Maharashtra, the city where Tesla has been rumored to land with a potential factory of its own. Kia invested $1.1 billion in 2017 and has been producing vehicles at its factory in the Anantapur District since January 2019. Electrification, where the global automotive industry is heading, is still a weak point in India. Less than 1% of the country’s cars are electric.
Because of the extensive and massive $27 billion budget that has been set aside for these programs, India has tried to persuade companies to bring manufacturing to the country directly. With a sky-bound budget and thirst for local manufacturing, the confusion begins to set in: Why is Tesla, a company with a reputation for building the world’s best electric vehicles, that could likely build a manufacturing facility anywhere in the world, having so much trouble landing a deal in India to manufacture its vehicles?
A Tesla Model 3 testing in India (Credit: pune_exotics | Instagram)
The disconnect seems to be between Tesla’s requests and India’s needs. When Elon Musk, Tesla’s CEO, tweeted last night that there were still “challenges” when working with the Indian government, which had put the plans on hold once again, it seemed that the automaker’s requests for import duty reductions went to the wayside. An issue that seems to be Tesla’s most integral wish, import duty reduction has received support from some Indian politicians, noting that demand testing, which has been one key factor in the company’s attempts to enter India, cannot happen if duties are too high. “If they have to manufacture here, they need the numbers, and no one can test the market when you impose such high import duty on the vehicles,” Union Road Transport Minister Nitin Gadkari said in August.
If import taxation was not an issue, Tesla could use data already available to them to determine whether a Gigafactory would make sense in India. Spoiler alert: Tesla would never build a factory in India based on sales figures from the past ten years as very few people can afford them when import duties are involved. Any vehicle below $40,000 is subjected to 40% tax. Any vehicle more expensive than $40,000 receives a 100% tax, effectively doubling the price of the vehicle. Currently, Tesla has no vehicles in its lineup that are under the $40,000 price threshold.
The problem is those import duties are a huge issue. India seems to be against doing it, at least for now, even though the massive $27 billion budget would not be directly affected by an import tax rollback. In fact, that budget could still factor in tax losses from duty reductions. Perhaps the reasons linked to Tesla’s delayed entrance into India could be linked to the automaker’s lack of need for other companies due to its vertical integration. While this sounds far-fetched, the President of the Automotive Component Manufacturers Association (ACMA) said that localization is always a priority, and companies entering the market need to promote local manufacturing across the board, not just with the final product.
This would include everything from complex factors like semiconductors to other elements that are as simple as car seats. Tesla makes many of its parts in-house, including some microcontrollers and its automotive seats. “Tesla is absurdly vertically integrated compared to other auto companies or basically almost any company. We have a massive amount of internal manufacturing technology that we built ourselves,” Musk said in late 2020. “This makes it quite difficult to copy Tesla, which we’re not actually all that opposed to people copying us because you can’t do catalog engineering. You can’t just [say] I’ll pick up the supplier catalog, I’ll get one of those.”
This leaves India at a crossroads because, while Tesla would be a great benefit to the economy, manufacturing efforts, and employment, the company would not have as much to offer other sectors and companies as an automaker that is less vertically integrated. Reports have indicated that Tesla was planning to source components from local suppliers, but details regarding these rumors were slim.
India Prime Minister Narendra Modi visits the Tesla Fremont Factory in 2015.
But Tesla is far from a liability for any region. After launching Gigafactory Shanghai in China in early 2020, the factory has become Tesla’s biggest producer of EVs and accounted for nearly 52% of the automaker’s total deliveries for 2021. Despite the company’s vertical integration, which has increased gross margin on some Made-in-China Tesla vehicles to nearly 40%, the company has provided China with many economic benefits. The site will soon employ 9,000 people on the Model Y line alone after a confirmed expansion found in Tesla’s Environmental Impact Assessment for 2021. Gigafactory Shanghai will have 18,000 employees by the time the line expansion is completed. Additionally, it has helped encourage the adoption of EVs in Europe through exports, making the Model 3 the best-selling EV on the continent in 2021, with over 109,670 units sold. The next closest was the Renault Zoe, with 58,242 sales.
Whether Tesla will ever enter India seems to be a question that has no definitive answer currently. However, Tesla has been teasing a potential entrance for seven years, ever since Modi visited the Fremont factory in 2015. The long saga of Tesla and India will continue for now. With Tesla’s attractive status as an EV powerhouse, other countries might come knocking on the door, stealing an opportunity to increase India’s slumping reputation as a manufacturing hub. Considering the Made In India initiative’s backtrack in manufacturing GDP, perhaps new strategies should be tested.
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Elon Musk
Tesla Optimus Gen 3 is coming to the Tesla Diner with new ambitions
Tesla’s Optimus robot left the Hollywood Diner within months of opening. Now Musk is planning its return with a bigger role and a major Gen 3 upgrade underway.
![Tesla Optimus Gen 3 [Credit: Tesla]](https://www.teslarati.com/wp-content/uploads/2026/03/tesla-optimus-gen3-diner.jpg)
Tesla’s Optimus robot was one of the most talked-about features when the Tesla Diner opened on Santa Monica Boulevard in Hollywood on July 21, 2025. Dubbed “Poptimus” by Tesla fans, the Gen 2 robot stood upstairs at the retro-futuristic, drive-in theater and Tesla Supercharging station, scooping popcorn into bags and handing them to guests with a wave.
The diner itself had been years in the making. Elon Musk first floated the idea in 2018 with a tweet about building an “old-school drive-in, roller skates & rock restaurant” at a Hollywood Supercharger. What eventually opened was a unique two-story neon-lit space, with 80 EV charging stalls, and Optimus serving as a live demonstration of where Tesla’s ambitions were headed.
If our retro-futuristic diner turns out well, which I think it will, @Tesla will establish these in major cities around the world, as well as at Supercharger sites on long distance routes.
An island of good food, good vibes & entertainment, all while Supercharging! https://t.co/zmbv6GfqKf
— Elon Musk (@elonmusk) July 21, 2025
But Optimus did not stay long, and was gone by December 2025.
Now, the robot is set to return with a more demanding job. Musk has ambitions for Optimus to take on a food runner role in 2026, delivering meals directly to cars at the Supercharger stalls. While the latest Gen 3 Optimus is likely to initially take on its previous popcorn-serving role, it wouldn’t be out of the question for Optimus to see a quick promotion. With improved hand dexterity that features 50 total actuators and 22 degrees of freedom per hand, and significantly more powerful processing through Tesla’s latest AI5 chip that includes Grok-powered voice interaction, Musk described Optimus at the Abundance Summit on March 12, 2026, as “by far the most advanced robot in the world, Nothing’s even close.”
Back to work
See you at Tesla Diner tomorrow pic.twitter.com/H3tTajrUbu
— Tesla Optimus (@Tesla_Optimus) March 30, 2026
That confidence is backed by a major manufacturing shift. At the Q4 2025 earnings call in January, Musk announced Tesla would discontinue the Model S and Model X and convert those Fremont production lines to build Optimus. “It’s time to basically bring the Model S and X programs to an end,” he said, calling for a pivot that reflects where the Tesla’s future lies.
Elon Musk
Musk forces Judge’s exit from shareholder battles over viral social media slip-up
McCormick insisted in a court filing that she harbors no actual bias against Musk or the defendants. She claimed she either never clicked the “support” button, LinkedIn’s version of a “like,” or did so accidentally.
Many Tesla fans are familiar with the name Kathaleen McCormick, especially if they are investors in the company.
McCormick is a Delaware Chancery Court Judge who presided over Tesla CEO Elon Musk’s pay package lawsuit over the past few years, as well as his purchase of Twitter. However, she will no longer be sitting in on any issues related to Musk.
Elon Musk demands Delaware Judge recuse herself after ‘support’ post celebrating $2B court loss
In a rare admission of potential optics issues in one of America’s most powerful corporate courts, Delaware Chancery Court Chancellor Kathaleen McCormick stepped aside Monday from a cluster of shareholder lawsuits targeting Elon Musk and Tesla’s board.
The move came just days after Musk’s legal team highlighted her apparent “support” on LinkedIn for a post that mocked the billionaire over his 2022 tweets about the $44 billion Twitter acquisition.
McCormick insisted in a court filing that she harbors no actual bias against Musk or the defendants. She claimed she either never clicked the “support” button, LinkedIn’s version of a “like,” or did so accidentally.
She wrote in a newly published memo from the Delaware Chancery Court:
“The motion for recusal rests on a false premise — that I support a LinkedIn post about Mr. Musk, which I do not in fact support. I am not biased against the defendants in these actions.”
Yet she granted the reassignment anyway, acknowledging that the intense media scrutiny surrounding her involvement had become “detrimental to the administration of justice.”
The consolidated cases will now be handled by three of her colleagues on the Delaware Court of Chancery, the nation’s go-to venue for high-stakes corporate disputes. The lawsuits accuse Musk and Tesla directors of breaching fiduciary duties through lavish executive compensation and lax governance oversight.
One prominent claim, filed by a Detroit pension fund, challenges massive stock awards granted to board members, alleging the payouts harmed the company. The litigation also overlaps with issues stemming from Musk’s turbulent 2022 Twitter purchase.
McCormick’s history with Musk made her a lightning rod. In 2022, she presided over the fast-tracked lawsuit that ultimately forced Musk to complete the Twitter deal after he tried to back out.
Then in 2024, she struck down his record $56 billion Tesla compensation package, ruling the approval process was flawed and overly CEO-friendly. The Delaware Supreme Court later reinstated the pay on technical grounds, but the ruling fueled Musk’s long-standing criticism of the state’s judiciary.
Musk has repeatedly urged companies to reincorporate elsewhere, arguing Delaware courts have grown hostile to visionary leaders. Monday’s recusal hands him a symbolic victory and underscores how personal social-media activity can collide with judicial impartiality standards.
Delaware law requires judges to step aside if there’s even a “reasonable basis” to question their neutrality.
Court watchers say the episode highlights growing tensions in corporate America’s legal epicenter. While McCormick maintained her impartiality, the appearance of bias proved too costly to ignore. The cases will proceed without her, but the broader debate over Delaware’s dominance in business litigation is far from over.
Elon Musk
Elon Musk has generous TSA offer denied by the White House: here’s why
Musk stepped in on March 21 via a post on X, writing: “I would like to offer to pay the salaries of TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout the country.”
Tesla and SpaceX CEO Elon Musk made a generous offer to pay the salaries of Transportation Security Administration (TSA) employees last week, but the offer was denied by the White House.
In a striking display of private-sector initiative clashing with federal bureaucracy, the White House has turned down an offer from Elon Musk to personally cover the salaries of TSA officers amid an ongoing partial government shutdown. The rejection, reported last Wednesday by multiple outlets, highlights the legal and political hurdles facing unconventional solutions to Washington’s funding gridlock.
The impasse began weeks ago when Congress failed to pass funding for the Department of Homeland Security (DHS), leaving TSA employees, essential workers who screen millions of travelers daily, without paychecks while still required to report for duty.
Frustrated travelers have endured record-long security lines at major airports, with reports of chaos and delays rippling across the country.
Musk stepped in on March 21 via a post on X, writing: “I would like to offer to pay the salaries of TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout the country.”
I would like to offer to pay the salaries of TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout the country
— Elon Musk (@elonmusk) March 21, 2026
But it was not for no reason.
White House spokesperson Abigail Jackson responded on behalf of the Trump administration, expressing appreciation for Musk’s gesture.
However, the legal obstacles, which would be insurmountable, would inhibit Musk from doing so. Jackson said:
“We greatly appreciate Elon’s generous offer. This would pose great legal challenges due to his involvement with federal government contracts.”
Musk’s companies hold significant federal contracts, including NASA launches through SpaceX and potential Defense Department work, raising concerns about conflicts of interest, ethics rules, and anti-bribery statutes that prohibit private payments to government employees. Administration officials also indicated they expect the shutdown to end soon, making external funding unnecessary.
The episode underscores deeper tensions in Washington. Musk, who has advised on government efficiency efforts and maintains a close relationship with President Trump, has frequently criticized wasteful spending and bureaucratic delays.
His offer came as airport security lines ballooned, drawing public frustration toward both parties. TSA officers, many of whom rely on paychecks to cover mortgages and family expenses, have continued working without compensation, a situation that has drawn bipartisan concern but little immediate resolution.
Critics of the rejection argue it prioritizes red tape over practical relief for frontline workers and travelers. Supporters of the White House position counter that allowing private funding sets a dangerous precedent and could undermine congressional authority over the budget.
The White House eventually came to terms with the TSA on Friday and started paying them once again, and lines at airports instantly shrank. The Department of Homeland Security (DHS) said that TSA staf would begin receiving paychecks “as early as” today.
![Tesla Optimus Gen 3 [Credit: Tesla]](https://www.teslarati.com/wp-content/uploads/2026/03/tesla-optimus-gen3-diner-80x80.jpg)
Tesla Optimus Gen 3 is coming to the Tesla Diner with new ambitions
Musk forces Judge’s exit from shareholder battles over viral social media slip-up
Elon Musk has generous TSA offer denied by the White House: here’s why
Elon Musk says Tesla is developing a new vehicle: ‘Way cooler than a minivan’
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
