Tesla dares BYD, BMW, Merc in India's luxury lane
Tesla displayed two variants at its Mumbai experience centre thronged by visitors, journalists and security personnel. Deliveries of the lower model with an ex-showroom price of ₹ 59.9 lakh begin this quarter itself, while the longer-range with rear-wheel drive model priced at ₹ 67.9 lakh will arrive in the December quarter.
Though the public and customers were not allowed inside the showroom for the event which was restricted to select media, dozens of enthusiasts crowded outside in the morning downpour, peering through glass walls and capturing photos. A Tesla employee based abroad expressed surprise at the unprecedented media turnout for at the showroom, which opens to customers on Wednesday.
'We are here to create the ecosystem to invest in the necessary infrastructure,' Tesla senior director Isabelle Fan told reporters. 'It will take some time to cover the whole country, but we're going to start with Delhi, Gurugram and Mumbai.'
Tesla said it will set up four charging stations each in Mumbai and Delhi-NCR. Early customers also get a free wall charger for home.
For Musk, the world's richest man, Tesla is the first of his several businesses to open shop in India. His satellite broadband business Starlink has received government approvals for launch, and is waiting for spectrum.
In India, the Model Y will take on BYD's Sealion 7, BMW's iX1 and Mercedes-Benz EQA.
'With their pricing, Tesla is competing with the iX1 as well as i4 from BMW and BYD's Sealion7. Choices for customers will increase in that segment and hopefully the segment will grow and EV penetration increase in that price bracket,' said Subhabrata Sengupta, a partner at Avalon Consulting.
India clocked sales of 107,645 electric passenger vehicles in FY25, up 18% from the previous year. While the number of electric luxury car sales remains small, BYD recorded a 90% jump in sales to 3,401, while Mercedes doubled sales to 1,133 units, according to Federation of Automobile Dealership Associations. BMW recorded a 9% increase in electric car sales to 1,550 units.
When a brand like Tesla arrives, it tends to boost the entire segment by drawing curious customers to showrooms, said Puneet Gupta, director at market intelligence firm S&P Global Mobility.
'Due to its premium pricing, Tesla will mainly compete with brands like BMW and Mercedes. With the strength of its brand , technology and the excitement surrounding its entry, the company is likely to see increased interest as consumers look to experience something new and something which is global.'
However, Tata Motors, Mahindra and Mahindra, Hyundai and MG Motors may be unscathed as their vehicles are available in the lower price ranges.
'I am confident that in the coming days, Tesla's entire ecosystem will be seen in India and Maharashtra,' chief minister Devendra Fadnavis said at the launch event, also attended by state transport minister Pratap Sarnaik.
For years, Tesla delayed its India entry citing high tariffs. In its March quarter earnings call, chief financial officer Vaibhav Taneja called India a very hard market due to the tariff regime.
"And especially under the current tariff structure in India, any car we send in is subject to a 70% import duty, plus a 30% luxury tax. So, the same car becomes 100% more expensive than what we sell it for elsewhere," Taneja had said.
With India negotiating trade deals with the US and Europe, the company would be keeping an eye on whether there is any relief on tariffs for cars, which can significantly reduce prices of its cars. Tesla manufactures its cars in the US, China and Germany. According to a Bloomberg report, cars sold in India will be shipped from its factory in Shanghai, China.
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