Why Tesla's ride into India's EV market won't be a smooth one

India Today

6 days ago

Tesla has finally made its entry into the Indian market, opening its first showroom at Maker Maxity Mall in Mumbai's Bandra Kurla Complex (BKC) on July 15.But even as the global electric vehicle (EV) giant begins its journey in the world's third-largest auto market, experts warn that the road ahead will be anything but easy.The entry comes at a time when Tesla is facing its biggest drop in global sales to date. Its domestic sales in the US fell 6.3% in the second quarter of 2025, the third straight quarterly decline.Sales in China dropped nearly 12% in the same period. In Europe, Tesla has seen a steady five-month fall in deliveries, partly due to political backlash and rising competition from cheaper Chinese EVs. In fact, Tesla's market share in Europe slipped to 1.2% in May, down from 1.8% a year earlier.Nearly 50% of Tesla's revenue comes from the US, while over 20% is from China. The remaining 30% is spread across other global markets. With shrinking numbers in its top markets, India now holds fresh promise, but also serious challenges.WHAT IS TESLA OFFERING IN INDIA?Tesla has introduced the Model Y in India, priced at Rs 60 lakh for the rear-wheel drive variant and Rs 68 lakh for the long-range version. These models are being sold as completely built units (CBUs), which means they attract heavy import duties, adding to the cost.In comparison, the same Model Y starts at $44,990 (around Rs 38 lakh) in the US, 263,500 yuan (around Rs 30 lakh) in China, and 45,970 euros (around Rs 41 lakh) in Germany.This pricing puts Tesla in competition with luxury EV models such as the Mercedes-Benz EQB, BMW iX1, Volvo EC40, and Kia EV6 in India.TESLA'S STRUGGLE AGAINST HOMEGROWN COMPETITIONJahol Prajapati, research analyst at SAMCO Securities, believes the Indian EV market is already fiercely competitive.'Tesla's arrival in India has electrified the market, both in terms of buzz and intent. The brand is global royalty. Its design is flawless. Its tech, unmatched. And yet, here's the truth most people won't tell you: this won't be an easy ride for Tesla in India,' he said.While Tesla's name may carry global appeal, Prajapati pointed out that the company's offering lacks the price-to-performance advantage many Indian buyers seek.
Source: SAMCO Securities
'The Tesla Model Y is priced close to Rs 60 lakh. In contrast, Mahindra, Tata, and BYD are fielding EVs in the Rs 19–30 lakh range, offering nearly equal, sometimes greater, value on range and performance. Mahindra's BE 6 delivers 557 km, BYD eMAX7 offers 530 km, and Tata Harrier EV and XEV 9e are not far behind. Tesla offers 500 km.'STRUCTURAL CHALLENGES MAY HURT GROWTHAnother major hurdle for Tesla is the lack of local manufacturing. Without setting up a factory in India, the company is unlikely to lower prices or become more competitive in the mass market segment. 'India is not a market that falls for logos. It's a market that worships value for money,' said Prajapati.He also flagged the slow rollout of EV charging infrastructure, which could restrict Tesla's growth. While the ecosystem is improving, it is still not developed enough to fully support Tesla's premium offerings.'Homegrown brands like Tata Motors, Mahindra & Mahindra, and BYD India aren't just selling EVs, they're building ecosystems. These firms have already established service networks, trust, and a deep understanding of price-sensitive Indian customers,' he added.INVESTOR OUTLOOK STILL POSITIVE FOR INDIAN BRANDSPrajapati stressed that investors in Indian EV stocks need not panic.'Tesla is a powerful brand, but it doesn't mean it will take over the market overnight. The entry of a big global player like Tesla will only push more innovation and investment into the space. This is a moment of opportunity for Indian firms," he said.Prajapati said that the Indian EV story would be led by affordability, ease of access, and strong after-sales service—areas where Tata and Mahindra have already built strong foundations.SUCCESS IN INDIA ISN'T EASYJSW Group chairman Sajjan Jindal also shared a similar view earlier this year.Speaking at an event in March, Jindal said Tesla and CEO Elon Musk would face tough competition from Indian carmakers. 'He can't be successful in India! We Indians are here. He cannot produce what Mahindra can do, what Tata can do,' he remarked.While he acknowledged Musk's global achievements, Jindal said India is a complex market where global success does not guarantee local growth. 'To be successful in India is not an easy job,' he said.- EndsTune InMust Watch
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