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Tesla is accelerating its plans to enter the Indian market. The company’s senior officials are set to visit the country in April. The delegation will engage with key government departments, including the Prime Minister’s Office (PMO), the Ministry of Heavy Industries, the Ministry of Road Transport and Highways (MoRTH), and the Ministry of Commerce. The visit aims to assess Tesla’s operational strategy in India and explore potential benefits under the government’s latest EV policies.
One of the world’s leading electric vehicle (EV) manufacturers, Tesla, is expected to launch its operations in India this year. Reports indicate that the company may begin sales as early as April, offering an affordable EV model priced around Rs 22 lakh. However, Tesla does not plan to set up a manufacturing unit in India immediately. Instead, it may initially import vehicles from its Berlin-Brandenburg Gigafactory in Germany.
In the first phase, Tesla is likely to introduce the Model 3 and Model Y in India. However, given that both models are priced significantly higher than $25,000 in international markets, it remains unclear how the company will adjust specifications to ensure competitive pricing. Since India is a price-sensitive market, affordability will be a key factor in Tesla’s success.
Tesla has also started recruiting staff in India, as seen in recent job postings on LinkedIn. The company is actively hiring for sales and service roles, including:
- Service advisor, service technician, and service manager
- Sales and customer support executives
- Store manager
- Business operations analyst
- Consumer engagement manager
The hiring push follows a meeting between Tesla CEO Elon Musk and Indian Prime Minister Narendra Modi in Washington, DC, where discussions centered on Tesla’s India expansion.
Tesla has already secured retail spaces in key Indian cities, Delhi and Mumbai. The company has reportedly bought a leased space in Aerocity, near Indira Gandhi International Airport and a location in Bandra Kurla Complex (BKC), a prominent business and retail hub.
These locations are strategically chosen to target premium customers and ensure visibility in India’s leading metropolitan markets.
Tesla has long expressed interest in entering the Indian market but previously cited high import duties as a major challenge. In response, the Indian government recently reduced EV import duties from 110% to 70% to attract foreign automakers. This policy change aligns with India’s goal of boosting EV adoption, which is growing at an annual rate of around 20%.
The company has identified Maharashtra’s Chakan and Sambhaji Nagar, along with locations in Gujarat, as potential sites for a future manufacturing facility. Tesla is expected to invest between $3 billion and $5 billion to establish a local production unit.
To benefit from reduced import duties and government incentives, Tesla will need to apply for the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI). Introduced in March 2024, this initiative aims to encourage domestic EV production.
Under the scheme, manufacturers must:
- Invest a minimum of Rs 4,150 crore in India.
- Achieve at least 25% domestic value addition (DVA) by the third year.
- Increase DVA to 50% by the fifth year.
“If Tesla wants to leverage tax benefits, it must commit to local manufacturing and strengthen India’s EV supply chain,” a government source said to some publications.
While India’s EV market remains smaller than China’s, where 11 million electric cars were sold last year, it is steadily expanding. In contrast, India recorded nearly 100,000 EV sales during the same period. Despite this gap, Tesla sees India as a high-potential market due to the government’s push for clean energy and incentives aimed at accelerating EV adoption.
Elon Musk was initially expected to announce Tesla’s India investment plans during a scheduled visit in April 2024. However, he canceled the trip due to other business priorities and instead traveled to China.
Tesla’s entry into India could be a game-changer for the country’s EV landscape. However, success will depend on competitive pricing, local manufacturing commitments, and strategic partnerships. With policy support and rising EV demand, India presents a promising market for Tesla’s long-term expansion.
