4 days ago
- Automotive
- New Indian Express
Tesla's India play: Niche appeal now, bigger potential later
Tesla's entry into the Indian market is unlikely to disrupt the existing electric passenger vehicle (PV) segment in the near term, but the American automaker has strong potential to emerge as a key player in the coming years.
"While the premium electric car segment remains niche, it is growing rapidly, driven by India's rising millionaire population and their appetite for high-tech vehicles," said Puneet Gupta, Director of India & ASEAN Auto Market at S&P Global Mobility.
Industry data shows luxury EV sales surged 66% year-on-year between January and May 2025. These vehicles now account for 11% of total luxury car sales, up from 7% in the same period last year.
Gupta suggests Tesla could explore setting up a manufacturing plant in India within 2-3 years, as rising passenger vehicle exports and shifting domestic demand may incentivize the automaker to develop India-specific models.
He also highlighted the timing of Tesla's strategy to initially sell cars as completely built units (CBUs) and potential benefits from ongoing India-US trade negotiations. "If the trade agreement reduces import taxes on American cars, Tesla could see a major price advantage, boosting its sales significantly," Gupta added.
Vinay Raghunath, Partner, Automotive and Mobility Sector Leader at EY India, said that while the initial impact of Tesla's entry may be more symbolic, it will undoubtedly elevate consumer awareness, spark greater interest in EVs and set new benchmarks in connected and autonomous mobility.
