GREENVISSAGE EXPLAINS: WILL TESLA MAKE AN IMPACT IN INDIA

After years of teasers, tweets, and speculation, Tesla has finally planted its flag in India. A gleaming showroom in Mumbai’s Bandra Kurla Complex and a Model Y on display mark the company’s long-anticipated arrival. But with an INR 60 lakh price tag, no local manufacturing plant, and a service network that barely exists, the real question isn’t “Is Tesla here?”, it’s “Is India still interested?” Tesla’s India entry could have played out very differently had it arrived when interest in electric vehicles (EVs) was still nascent. Back in 2017, India was ripe for a transformative player like Tesla. The company was then in its global ascendancy, revolutionising electric mobility and building brand cachet that few automakers could match. But India’s punitive import duties, up to 100%, stood in the way. Tesla refused to commit without concessions. India, sticking to its “Make in India” policy, refused to bend. A standoff ensued, and Tesla looked elsewhere. Now, in 2025, Tesla enters an India that has changed. But so has the EV landscape, and not in Tesla’s favour. Domestic giants like Tata and Mahindra have stepped up. BYD, the Chinese rival that has overtaken Tesla in global EV sales, has already gained traction in the Indian market despite geopolitical headwinds. The premium EV space Tesla might have dominated is now competitive and, more critically, limited in size. Tesla’s current presence in India is best described as a toe-dip, not a plunge. A single showroom and a modest service centre hardly signal deep commitment. More notably, Tesla has yet to officially enrol in the Indian government’s 2024 EV import policy, a scheme tailor-made for it. The policy offers a reduced 15% import duty on up to 8,000 EVs annually, provided the manufacturer pledges significant investment and localisation over time. So why the hesitation? Perhaps this is Tesla’s playbook in action. In China, it waited, lobbied, and negotiated until favourable policies and subsidies fell into place, then swiftly built a Gigafactory. In Europe and the US, Tesla extracted tax breaks before making major moves. India may be no different. By establishing a minimal presence now, Tesla can build consumer buzz while holding the option to scale quickly if the business case strengthens or policy softens further. From Tesla’s perspective, India still represents untapped potential. It’s now the third-largest car market by volume, has a youthful demographic, and is increasingly urbanised. The government’s EV ambitions, 30% of new cars to be electric by 2030, make it an attractive long-term play. More importantly, India could serve as a regional manufacturing and export hub. Tesla already sources components from Indian suppliers; setting up a plant here could streamline global operations and hedge against geopolitical risk in China. But opportunity doesn’t negate complexity. India remains a value-conscious market. The bulk of passenger car sales occur under INR 15 lakh. Less than 1% of those are luxury vehicles. Charging infrastructure, while improving, remains patchy outside major metros. And the average consumer doesn’t have a garage, making home charging a logistical challenge. Even among India’s well-heeled elite, brand loyalty lies with Mercedes, BMW, and Audi, companies with decades of presence, wide service networks, and local assembly lines. Tesla, by contrast, has trust to rebuild. Indian consumers remember the earlier broken promises, the unfulfilled bookings, and the public spats over import policy. A showroom alone won’t undo that scepticism. Yet, to focus purely on short-term sales is to miss Tesla’s deeper game. The Model Y may not flood Indian roads anytime soon, but its presence reshapes expectations. Tesla doesn’t just sell EVs, it sells a vision of the future. High-performance software updates, minimalistic design, and battery leadership are all areas where domestic players are now pushed to compete harder. Tata’s EVs have improved dramatically over the past few years, and Mahindra’s latest designs reflect a global aesthetic, not just a local one. This aspirational shift matters. Disruption doesn’t always begin with affordability; it begins with desirability. In India, Apple didn’t sell iPhones to the masses right away. But it influenced what phones should feel like. Tesla might play a similar role in the EV ecosystem: a catalyst rather than a competitor, at least for now.

References

1. Reuters – Musk’s Tesla marks formal India entry with Mumbai launch event
2. Hindustan Times – Tesla showroom in Mumbai: Key facts on India’s costliest lease deal and the company’s real estate portfolio
3. Observer – Tesla Enters India at Last, Navigating High Tariffs and Trade Tensions
4. Image by Vectorjuice on Freepik