Tesla India Entry: Elon Musk's Long-Awaited Debut

Tesla Enters Indian Market with First Showroom

After a nine-year period following initial indications from CEO Elon Musk in April 2016, Tesla has officially begun operations in India. This launch follows numerous postponements and evolving strategies within one of the world’s most substantial automotive sectors.

Experience Center Details

Tesla designates its initial retail location as an “Experience Center.” It is situated within Maker Maxity Mall, located in the Bandra Kurla Complex, Mumbai’s primary business hub. The 4,000-square-foot facility showcases the Model Y, available in rear-wheel drive (RWD) and long-range RWD configurations, which are being imported from the Shanghai facility.

Pricing and Options

The Model Y RWD is offered at a price of ₹59,89,000 (roughly $68,000). The long-range RWD version is priced at ₹67,89,000 (approximately $79,000). Additionally, a full self-driving capability add-on is available for ₹600,000 (around $7,000).

Ordering and Delivery Timelines

Customers in India can now place orders for the Model Y, with registration open in Delhi, Gurugram, and Mumbai. A non-refundable deposit of ₹22,220 (approximately $260) is required to secure an order. Deliveries of the RWD variant are anticipated to commence in the third quarter, while the long-range RWD is expected to arrive in the fourth quarter.

Charging Infrastructure

Prior to vehicle deliveries, Tesla is committed to installing four charging stations in both Mumbai and Delhi. These will include both Supercharger stations and destination chargers to support the growing EV ecosystem.

Future Expansion Plans

The company intends to open a second store in Delhi later this month, signaling a broader expansion strategy within India. Furthermore, Tesla plans to import vehicles from its Berlin factory once the India-EU free-trade agreement is finalized.

India's Automotive Landscape

India represents the fourth-largest automotive market globally, producing nearly 6 million vehicles annually, according to government data. However, electric vehicle adoption remains relatively low, largely concentrated within the two-wheeler segment. The nation aims for 30% of all automotive sales to be electric by 2030.

Past Attempts and Negotiations

In 2016, Musk initially announced plans to introduce the Model 3 to India and establish a Supercharger network. Deposits were even collected from potential customers, but were later refunded due to launch uncertainties.

Government Interactions

Musk has engaged in multiple discussions with Prime Minister Narendra Modi and other senior government officials regarding Tesla’s plans. Early negotiations involved the Indian government attempting to incentivize Tesla to establish a manufacturing facility within the country.

Component Sourcing and Manufacturing Considerations

In 2023, India’s commerce minister, Piyush Goyal, indicated that Tesla was planning to almost double its component sourcing from India, potentially reaching $1.9 billion. Despite these discussions, Musk has remained hesitant about establishing a local factory in the near future, according to sources.

Current Operational Structure

Tesla has been actively recruiting personnel in India, with numerous positions currently listed in cities like New Delhi, Pune, and Mumbai. Currently, the company lacks a dedicated India head. Prashanth Menon, previously overseeing India operations, resigned in May, also stepping down as chairman of Tesla India’s board.

Leadership and Oversight

Tesla CFO Vaibhav Taneja is presently overseeing India operations, supported by local board directors responsible for policy, sales, and human resources.

Recent Policy Changes and Market Outlook

Import taxes on EVs were reduced in New Delhi in 2024, enabling Tesla to import vehicles at lower rates. Despite ongoing import duties, Taneja described the Indian market as “very hot” during Tesla’s April earnings call. India’s minister for Heavy Industries, H.D. Kumaraswamy, recently confirmed Tesla’s plans, stating the company has no immediate interest in local manufacturing.

Global Market Challenges

The Indian launch occurs as Tesla faces challenges in key markets like China, Europe, and the U.S. Competitors, such as BYD, are gaining market share in China, impacting Tesla’s performance.

Sales Performance Data

Tesla’s China-made EV sales saw a 16% year-over-year increase, including domestic sales and exports. However, overall deliveries in Q2 declined by 6.8% year-over-year, marking the third consecutive quarterly decrease. European sales fell by nearly 28% year-over-year in May, while U.S. sales decreased by 13% in the first half of the year, reaching 255,000 units. Global sales dipped 13% to 443,956 units in Q2.