Tesla has resumed its operations in India by advertising for various job openings, which has sparked renewed speculation regarding its official entry into the market. Notably, this development follows closely after Prime Minister Narendra Modi's meeting with Tesla CEO Elon Musk during the Prime Minister's recent trip to the United States. While there has been considerable buzz surrounding the potential launch of a ₹21 lakh Tesla vehicle in India, reports indicate that the current most affordable model, the Tesla Model 3, is expected to be priced at a minimum of ₹35 lakh in the country.

A report from CLSA, a global capital markets firm, suggests that even with a reduction in import duties to below 20 percent, the Tesla Model 3 would still be priced between ₹35 lakh and ₹40 lakh. In the United States, the Model 3 is currently priced at approximately $35,000, which is around ₹30.4 lakh. With anticipated import duty reductions to 15-20 percent in India, along with additional expenses such as road tax and insurance, the on-road cost of the Tesla Model 3 in India is projected to remain in the range of ₹35-40 lakh.

The report further indicates that at this price point, Tesla is unlikely to make a significant impact on the Indian electric vehicle market. If Tesla sets the Model 3's price 20-50 percent higher than domestic electric vehicles such as the Mahindra XEV 9e, Hyundai Creta Electric, and Maruti Suzuki e-Vitara, it is improbable that the company will disrupt the Indian EV landscape significantly. Additionally, the report asserts that Tesla's entry is not expected to have a major effect on leading Indian automakers, as the overall adoption of electric vehicles in India is still lower than in China, Europe, and the United States.

Tesla aims to open showrooms in Delhi and Mumbai

In the upcoming months, Tesla plans to establish showrooms in Delhi and Mumbai. The electric vehicle manufacturer has officially initiated its hiring process in India, marking a crucial advancement towards its long-awaited entry into the country's passenger vehicle sector. On February 18, Tesla posted job listings on LinkedIn for 13 different positions.

Tesla must invest over ₹4,150 crore to get lower import duty benefits

The report indicated that Tesla must establish a manufacturing plant in India to enhance the affordability of its vehicles for the local market and to expand its operations, even if import duties are lowered to below 20 percent. Additionally, the report emphasized that according to India's electric vehicle policy, Tesla could take advantage of a reduced import duty of 15 percent on up to 8,000 units annually, provided it invests over ₹4150 crore in creating a domestic facility.

In summary, Tesla's successful entry into the Indian market hinges on its readiness to make a substantial investment in local production. Absent such investment, even with decreased import duties, Tesla's vehicles may still be financially inaccessible to a significant number of Indian consumers, as noted in the report.

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