Tesla opens first showroom in India, but too expensive for locals
Located in the Bandra-Kurla Complex, an upscale business centre in the financial capital of Mumbai, the showroom will serve as Tesla's flagship retail and experience outlet as the company introduces its EV lineup to Indian customers.
Tesla's entry to India comes after years of delays and policy friction, marking a pivotal expansion in a fast-growing consumer base while global sales are plunging and the company faces challenges in its two core markets, China and the United States.
Sales of Tesla electric cars fell sharply from April to June as boycotts continued over CEO Elon Musk's political views, keeping buyers away.
For India, Tesla's entry signals rising investor confidence and strengthens its move towards clean mobility, although Tesla's higher pricing is likely to make its cars unaffordable for most Indians.
The country's nascent electric vehicle market made up a little more than 2 per cent of total car sales last year. But the government wants to change that and increase the electric vehicle share to 30 per cent by 2030.
Tesla will begin by importing and selling its popular Y model cars in India. The base price would be 6.78 million rupees (€68,000) for the long-range, rear-wheel drive vehicle, according to a presentation by the company during the showroom launch on Tuesday. Delivery is expected to start from the third quarter, Tesla officials said.
By comparison, the price tag is around $44,990 (€37,000) in the US without a federal tax credit.
Tesla will compete mostly with German luxury carmakers such as BMW and Mercedes-Benz Group AG, and not budget Indian players like Tata Motors Ltd. and Mahindra & Mahindra Ltd. The luxury car market makes up just about 1 per cent of total vehicle sales.
Wooing Tesla
The debut by American EV giant, however, would bring in world class technology to the country, auto analyst Gaurav Vangaal said.
'With deeper local investments, Tesla can accelerate India's EV ecosystem, drive innovation, and support the government's goal of higher EV penetration,' said Vangaal, an associate director with S&P Global Mobility.
Prime Minister Narendra Modi's government has wooed Tesla for years for its global brand value and to boost the country's clean energy endeavours.
Musk invited Indians in April 2016 to preorder the upcoming Tesla Model 3. Several customers placed an order, but the cars never arrived and the bookings had to be refunded.
Despite his earlier enthusiasm, in 2019 Musk expressed concern in a post on his social media platform X that import taxes could double prices of Tesla cars, making them 'unaffordable'.
Tesla pressed Indian authorities to cut import taxes on EVs, which were up to 100 per cent, to be able to test the local market. New Delhi, however, wanted Tesla to set up manufacturing facilities so a comprehensive policy could benefit all the players in the sector.
The dynamics changed after Modi and Musk met in the US in February during a state visit by Modi.
Barely a month later, India rolled out a new policy to woo the likes of Tesla, reducing import taxes to 15 per cent from 70 per cent to 100 per cent for EVs priced cheaper than $35,000 (€29,900), as long the automaker committed to building a factory in the country within three years.
Soon after, Musk announced he would visit India in April to meet Modi. It was widely expected he would unveil Tesla's plans to set up manufacturing facilities and commit billions of dollars in investments. But Musk cancelled the visit, citing 'very heavy Tesla obligations,' and travelled to China instead.
Since then, Tesla has conveyed it does not have an immediate interest in manufacturing in India.
US President Donald Trump has said it would be 'unfair' to the US if Tesla builds a factory in India to circumvent that country's tariffs.
Besides bringing Tesla to India, Musk's goal has been to launch Starlink's commercial internet services there. The plan got a boost recently after the company secured regulatory clearances.
Starlink now needs to secure telecommunications airwaves from the government, which may take at least a couple of months, before the services are formally launched.
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