Tesla is Finally Entering India
After years of speculation and false starts, Tesla’s entry into India now appears to be on firm footing. The Austin-based automaker, valued at $1.1 trillion, is set to launch operations in the country by April this year. The company has already begun hiring, posting job listings for at least 13 positions on LinkedIn, and has reportedly shortlisted Mumbai and New Delhi for its first showrooms—following a strategy similar to Apple’s retail expansion in India.
Tesla’s move into the world’s fourth-largest automobile market comes on the heels of a meeting between its CEO, Elon Musk, and Indian Prime Minister Narendra Modi in the U.S. last week. A similar meeting two years ago had sparked speculation about Tesla’s arrival, but the plan faltered due to India’s high taxation on imported vehicles.
This time, with India lowering import duties on cars priced above $40,000 from approximately 110% to 70%, Tesla seems more committed. Reports suggest the company is even considering launching a more affordable model, priced around ₹21 lakh. While this may take time—given that Tesla’s cheapest model costs about $38,000 (₹33 lakh) in the U.S.—the brand’s entry is set to shake up the Indian EV market.
Initially, Tesla is expected to import popular models like the Model 3, Model S, and Model Y from its German factory to build brand recognition before considering local manufacturing. Although former U.S. President Donald Trump has expressed skepticism about Tesla setting up a factory in India, Musk understands the long-term potential of operating in one of the world’s fastest-growing auto markets.
India currently has only 34 cars per 1,000 people, compared to over 860 per 1,000 in the U.S. With rising incomes, increased access to financing, and a national push toward clean energy, India presents a massive opportunity for Tesla. Meanwhile, Tesla’s global sales have dipped by 1.1%, underscoring the need to expand into new markets.
Adding manufacturing capacity in India would also help Tesla maintain its cost advantage, especially as competitors like Volkswagen, Mercedes, and Chinese EV makers ramp up production. The Indian government’s revised EV policy, offering import duty concessions to automakers investing at least $500 million locally, makes the market even more attractive. Under this policy, EV import duties on cars priced above $35,000 will drop from 70-100% to 15%—provided manufacturers meet investment and domestic production requirements.
However, Tesla won’t have an easy ride. Indian automakers have been rapidly expanding their EV portfolios and will pose stiff competition. Mahindra, for instance, recently secured 30,000 bookings for its new electric models. One of these, the BE 6, boasts a 0-100 kmph time of 6.7 seconds, a 682 km range, and 20-minute fast charging. The other, the XEV9e, features a three-screen dashboard setup.
“Tesla’s entry will undoubtedly shake up India’s automotive sector,” says Puneet Gupta, director at S&P Mobility. “While budget-friendly models like the Tata Punch may remain unaffected, the premium EV segment—where brand value plays a key role—will feel the impact.”
Vinay Piparsania, founder of MillenStrat Advisory & Research and a former Ford Motors executive, adds: “Tesla is perceived as the most innovative automaker. In China, despite strong domestic competition, Tesla has made huge inroads and disrupted the market. With the right policy support, they can elevate the EV narrative in India too.”
As the Indian EV market matures, Tesla’s arrival is set to accelerate the country’s shift toward sustainable mobility, making the competition fiercer than ever.
