Tesla Arrival: A New Era for India’s EV Market
Tesla is finally making its much-anticipated foray into the Indian market, according to a senior government official. The announcement is expected to come after a meeting between Prime Minister Narendra Modi and Tesla’s CEO, Elon Musk, slated for April 22. However, it’s likely to be a broad declaration of Tesla’s entrance into India rather than pinpointing specific locations. Site-specific announcements typically require board approval, which might come later. The official, speaking anonymously, noted that Musk may express appreciation for India’s EV policy and express eagerness to tap into the Indian market soon.
“It’s more about signaling,” the official emphasized.
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Musk himself confirmed the buzz around his India visit on April 10 through a post on X, the microblogging platform he currently oversees, expressing anticipation about meeting Prime Minister Modi.
The last encounter between Musk and Modi occurred in New York in June. Tesla had been advocating for reduced import taxes on EVs in India while contemplating establishing a manufacturing facility in the country.
Last month, the Indian government unveiled a revamped EV policy, slashing import taxes to 15 percent from a staggering 100 percent on select models, provided the manufacturer invests at least $500 million and sets up a local factory. Musk’s visit coincides with the general election fervor; polling begins on April 19, with Modi’s Bharatiya Janata Party expected to clinch a rare third term.
The official disclosed that Musk is scheduled to arrive in India on April 21 and will meet Modi the following day.
Regarding the meeting’s aftermath, the official hinted at a potential press release and video, but ruled out a media briefing.
Tesla’s Vision for India
The overarching goal is to position India as a manufacturing hub for Tesla’s affordable EV variant, priced between Rs 20-25 lakh. Additionally, Tesla’s premium models might also roll off Indian assembly lines. “The aim is for Musk to manufacture EVs in India at a more accessible price point,” the official remarked.
Earlier this month, Reuters reported that Tesla had commenced production of right-hand drive cars at its German plant for export to India later this year. “We anticipate that once Musk begins producing low-cost vehicles in India, akin to Apple, many of these will also be exported to other South and Southeast Asian nations, and even Africa. So, besides catering to the domestic market, there’s potential for significant exports,” the official added.
Tesla’s potential pivot towards India coincides with sluggish EV demand in its primary US and China markets, coupled with heightened competition from Chinese automakers.
India’s EV market, although modest, is on an upward trajectory, dominated by Tata Motors. EV sales constituted just 2 percent of total car sales in 2023, but the government has set an ambitious target of achieving 30 percent by 2030.