The world’s most prominent electric vehicle (EV) maker, Tesla, might enter in India as soon as April this year. While according to reports close to Tesla’s Indian strategy, Tesla plans to import EVs from its Berlin Gigafactory and sell them in India. It is part of Tesla’s larger plan to introduce a sub-$25,000 electric cars to increase its market share globally in the face of growing competition from BYD and other automakers.
Tesla’s showroom and hiring plans
Tesla has allegedly finalized places for its company -owned showrooms in India, with a prominent place in Delhi’s Arocity and Mumbai’s Banda Kurla Complex (BKC). These high-profile places suggest that Tesla aims to establish a strong presence in the major metropolitan cities. Additionally, the company has already started hiring for various positions in Mumbai, including an adjacent launch indication, including Store Manager, Service Advisor and Technicians.
India’s tariff policy and reciprocal tariff threats
India’s high tariffs on foreign-made cars have been an issue for Tesla for a long time. Although the Indian government has now lowered the basic customs duty (BCD) on imported EVs that cost over $40,000 from 100% to 70%, the effective BCD on cars that sell up to $40,000 still stands at 70%. Such a tariff regime remains a challenge for automakers seeking to enter India.
Adding to the complexity, the United States has promised to retaliate with reciprocal tariffs on nations that keep high tariffs on US imports. A possible executive order by President Trump may become effective in April once US federal agencies finish analyzing country-specific tariffs. Implementing such reciprocal tariffs might not just affect Indian auto exports but also other industries, and that would have implications on future trade talks.
Elon Musk’s meeting with India’s Prime Minister
Elon Musk, on February 13, sat down with the Indian Prime Minister for a one-hour conversation. The Prime Minister reported that the meeting touched on several of the most important issues, including space, mobility, technology, and innovation. Musk afterward acknowledged the meeting in a tweet but did not make any detailed revelations about Tesla’s plans in India.
The US President, when questioned regarding Musk’s meeting with India’s PM, said that he did not know if Musk had gone as the CEO of Tesla or as a US government representative. Sources indicate that Musk is interested in increasing Tesla’s presence in India and looking at business opportunities.
Tesla’s sourcing strategy in India
Although Tesla hasn’t made the commitment to start manufacturing in India yet, Tesla is projected to source more than a billion dollars’ worth of parts from Indian vendors this year. That amount could go a lot higher in the next few months as Tesla solidifies its supply chain connections with India.
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The road ahead
Tesla’s possible foray in India is a big milestone for India’s EV industry. But regulatory challenges, import duties, and the current trade tensions between India and the US may influence the plans for expansion by the company. Musk will also be joining the US President on a trip to India this autumn for the Quad Summit, and trade negotiations, including car tariffs, are likely to be part of the agenda.
With Tesla itself investigating means of traversing India’s intricate policy environment, its Indian market success will hinge on how it reconciles cost, tariffs, and possible future production investments.