How much will a Tesla EV cost in India?
What's the story
Tesla is gearing up for its highly-anticipated entry into the Indian market. However, even with potential import duty reductions, Tesla's most affordable EV is likely to remain beyond the reach of the majority of Indian consumers.
Even if the Indian government reduces import duties to less than 20%, Tesla's cheapest electric car could still cost between ₹35-40 lakh, as per global capital markets firm CLSA.
Market impact
Tesla's Model 3 pricing compared to domestic EVs
Currently, Tesla's cheapest car—Model 3—costs around $35,000 (approximately ₹30.4 lakh).
With reduced import duties but additional costs such as road tax and insurance, the on-road price in India would still be around $40,000 or ₹35-40 lakh.
At that price, the Model 3 will 20-50% costlier than local EVs such as the Mahindra XEV 9e, Hyundai Creta Electric, and and Maruti's upcoming e-Vitara.
Hence, it won't have much impact on India automakers but players like BYD will be in direct competition.
Market penetration
Tesla's entry unlikely to affect major Indian automakers
The report further states Tesla's entry won't be a major threat to big Indian automakers. This is because the penetration of EVs in India is lower than other markets like China, Europe, and the US.
The firm added that even if Tesla launches a budget model under ₹25 lakh on-road and captures some market share, this potential scenario is already priced in Mahindra & Mahindra as well as Tata Motors' recent stock fall.
Manufacturing strategy
Local manufacturing key to Tesla's competitive pricing in India
The report stresses that for Tesla to provide more competitive pricing and scale its operations, it needs to set up a manufacturing facility in India.
The company is exploring plans to set up a factory here with Maharashtra and Andhra Pradesh wooing the EV giant with attactive incentives.
Tesla plans to initially launch its electric cars in Delhi and Mumbai as soon as April. The first batch of EVs will likely be imported from Germany.