Tesla Identifies Showroom Space in Mumbai and Delhi

India is making strategic moves to establish itself as a global manufacturing hub, successfully attracting major companies such as Apple. Now, the Indian government is focusing on securing Tesla’s entry by implementing a new electric vehicle (EV) tariff policy designed to incentivise foreign automakers.

Tesla, which has long been hesitant about entering the Indian market, is reportedly taking steps toward establishing a presence in the country. The company has begun recruiting employees and scouting locations for potential showrooms following a meeting between Indian Prime Minister Narendra Modi and Tesla CEO Elon Musk earlier this month. Interestingly, the Maharashtra government has offered land in Chakan and Chikhali, two major automobile hubs near Pune, to attract Tesla’s investment, while the company is also actively looking for showroom space in New Delhi’s Aerocity area. 

India introduced an EV policy last year that proposes reducing import duties on EVs to 15 per cent from the existing 70 per cent. The government is expected to start accepting applications under this policy before the end of March. However, the policy applies only to premium EVs priced above ₹30 lakh and requires an investment of nearly $500 million, along with a long-term commitment to local manufacturing. 

This policy is widely seen as a direct effort to attract Tesla, signaling India’s readiness to support EV manufacturing. Despite these incentives, Tesla faces several hurdles in entering the world’s third-largest automobile market

A recent research note by Bank of America highlighted concerns over Tesla’s pricing structure. Under India’s EV policy, the minimum landed price for a Tesla vehicle would be around ₹35 lakh —significantly higher than what domestic automakers cater to. This price point suggests a limited addressable market for Tesla in India.

Moreover, Tesla would need to adhere to strict investment timelines, including setting up a manufacturing facility within three years and achieving 50 per cent domestic value addition within five years. 

Competition from Chinese EV makers such as BYD and even the recent entry of Vietnamese-based EV maker VinFast also adds pressure. While India’s EV market remains small, securing a foothold in the country could be a strategic move for Tesla as it seeks to diversify amid rising global competition. 

While the timeline for Tesla’s full-scale entry remains uncertain, industry projections indicate that India’s passenger battery electric vehicle (BEV) market could reach 1 million units by 2030, accounting for 20 per cent of total car sales, according to GlobalData’s Ammar Master.