After a long wait of nine years since CEO Elon Musk first hinted at the possibility in April 2016, Tesla has finally made its grand entry into India with the inauguration of its first showroom. This milestone comes after years of setbacks and fluctuating timelines in one of the world's largest automotive markets.
The showroom, which Tesla refers to as an “Experience Center,” is strategically located in the Maker Maxity Mall within the Bandra Kurla Complex, Mumbai's central business district. Spanning 4,000 square feet, the center showcases the Model Y in both rear-wheel drive (RWD) and long-range RWD versions, which are imported from Shanghai.
The Model Y RWD is priced at ₹59,89,000 (around $68,000), while the long-range RWD variant is tagged at ₹67,89,000 (approx. $79,000). Additionally, customers have the option to add the full self-driving feature for ₹600,000 (approx. $7,000). Starting today, Indian customers in Delhi, Gurugram, and Mumbai can place orders for the Model Y by paying a non-refundable deposit of ₹22,220 (approx. $260). Deliveries of the RWD variant are slated to commence in the third quarter, and the long-range RWD is expected to hit the roads in the fourth quarter.
Prior to the deliveries, Tesla has pledged to set up four charging stations in both Mumbai and Delhi, including Supercharger posts and destination chargers. As part of its expansion plans in India, the company is also set to open its second store in Delhi later this month. TechCrunch has learned that once the India-EU free-trade agreement is inked, the automaker intends to import cars from its Berlin facility.
India, the fourth-largest automotive market globally, trailing only China, the US, and Japan, produces nearly 6 million vehicles annually, as per Indian government data. However, the country has a relatively small electric vehicle (EV) footprint, mainly dominated by two-wheelers. Nevertheless, India has ambitious plans to make 30% of all automotive sales electric by 2030.
Back in 2016, Musk announced the intention to launch Tesla's Model 3 in India and also hinted at the establishment of a local Supercharger network. The company even accepted $1,000 deposits from prospective Indian customers, which were recently refunded due to the uncertainty surrounding the launch.
Musk has had several discussions about Tesla's plans in one-on-one meetings with Prime Minister Narendra Modi and his senior officials. During the initial years of negotiations, the Indian government strived to persuade and even urged Tesla to set up its factory in the country to kick-start operations.
In 2023, India's commerce minister Piyush Goyal stated that Tesla was planning to nearly double its component sourcing from India to up to $1.9 billion that year. Modi and his officials also held talks with Tesla executives regarding the company's manufacturing presence in India. However, sources informed TechCrunch that Musk remained unconvinced about setting up a local factory in the near future.
Tesla has hired numerous individuals in India and still has tens of job openings in cities such as New Delhi, Pune, and Mumbai. Currently, the company does not have a designated head in India. In May, Prashanth Menon, who was overseeing India operations, resigned from his position and reportedly stepped down as chairman of Tesla India's board. TechCrunch has learned that Tesla CFO Vaibhav Taneja is currently overseeing India operations, with a few local board directors handling policy, sales, and human resources.
In 2024, New Delhi reduced import taxes on EVs, enabling Tesla to import cars from foreign markets at lower levies. Tesla had long been vocal about its concerns regarding India's 100% import tariffs on cars. But in its April earnings call, Taneja said the company still considered the market to be “very hot” despite the high duties. Last month, India's minister for Heavy Industries, H.D. Kumaraswamy, confirmed Tesla's plans and stated that the company was “not interested in starting manufacturing in India.”
The India launch comes at a time when the Austin-headquartered company is facing challenges in major markets, including China, Europe, and the US. Local players, such as BYD, which also operates in India and is among the few electric car companies serving Indian buyers, are chipping away at Tesla's market share in China.
Overall, Tesla's China-made EV sales increased 16% year-over-year, including both domestic sales in China and exports to Europe and other markets. However, the company's Q2 deliveries declined 6.8% year-over-year, marking the third consecutive quarterly drop, as local competitors gained ground.
Similarly, Tesla's sales in Europe declined by nearly 28% year-over-year in May for the fifth consecutive month, despite an overall 1.9% increase in European car sales. In the US, the company experienced a 13% year-over-year decline in sales for the first six months of this year, reaching 255,000. Moreover, Tesla's global sales dipped 13% to 443,956 units in the second quarter. As Tesla embarks on its journey in India, it will be interesting to see how it navigates the unique challenges and opportunities of this vast market, especially in the face of increasing competition and evolving consumer preferences.
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