After years of speculation, Tesla appears to be making its long-awaited debut in India. The American electric vehicle (EV) giant has begun hiring for key positions in Delhi and Mumbai while actively scouting for showroom locations in both cities.
India, the world’s third-largest economy, presents a lucrative yet challenging market for Tesla, especially as global EV sales decline and competition from Chinese manufacturers intensifies. However, the company’s success in India remains uncertain due to the country’s price-sensitive consumer base.
Tesla’s base model is expected to cost around $40,000 (₹33 lakh), positioning it as a luxury car in India. This is significantly higher than EVs from local manufacturers such as Tata Motors, MG Motors, and Mahindra, whose models cost less than half that price. Tata Motors currently dominates the Indian EV market with over 60% market share, followed by MG Motors at 22%.
Additionally, India's road conditions could pose another hurdle for Tesla. The company’s vehicles have low ground clearance, which may require re-engineering to adapt to Indian roads, increasing production costs.
Despite these challenges, the Indian government has been aggressively promoting EV adoption. The country aims to have 30% of private cars, 70% of commercial vehicles, and 40% of buses running on electricity by 2030. Incentives such as high subsidies—covering up to 46% of the cost of top-selling EV models—have fueled rapid growth, with passenger EV sales soaring by over 2,000% in just five years.
India has also eased import duties on EVs for global automakers that commit to investing $500 million and setting up local production within three years. Tesla and other companies can now benefit from a reduced 15% import duty on up to 8,000 vehicles.
While Tesla’s entry is expected to cater primarily to India's wealthy elite, experts believe the brand’s status as a premium, tech-driven EV will appeal to aspirational young buyers. “Tesla's superior battery technology and user interface set it apart from the competition,” said Hormazd Sorabjee, editor of *Autocar India*.
However, domestic carmakers remain unfazed by Tesla’s arrival. “We welcome competition,” said Rajesh Jejurikar, CEO of Mahindra and Mahindra, emphasizing that more players will strengthen India’s EV ecosystem.
Despite speculation, Tesla has not yet committed to setting up a manufacturing facility in India. The company appears to be focusing on importing vehicles for now. The final decision may depend on factors such as India's evolving tariff policies and ongoing trade negotiations with the US.
Former US President Donald Trump has already criticized Tesla's potential India investment, calling it “unfair” to the American economy. If Trump returns to power, his "America First" policies could influence Elon Musk’s expansion plans.
For now, Tesla seems set to enter India with luxury showrooms rather than job-creating factories. The EV giant’s long-term presence in the country will hinge on government policies, consumer demand, and Musk’s global strategy.