Elon Musk’s Tesla will penetrate the Indian market in the upcoming months. Reports suggest that even after a 15%-20% import duty reduction, Tesla’s cheapest wouldn’t be budget-friendly to most Indians. The expected road price of the company’s cheapest car will be around ₹35-₹40 Lakhs, as per CLSA. Let’s explore this news in detail, such as how much Teslas will cost exactly, what are analysts views, and what Elon Musk will have to do to dominate the Indian market.
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Most Indians Will Not Afford Musk’s Tesla’s Cheapest Car.
Elon Musk’s Tesla is fully ready to enter the Indian market with its super-advanced Electric Vehicles. This entry raises several questions, and the most viral question is ‘Affordability. According to reports most Indians will not afford even Musk’s Cheapest car.
Tesla’s cheapest Model 3 in the American market costs around $35,000 (approximately ₹30.4 lakh) at the factory level. With the anticipated decrease in import duties to 15-20 percent in India, along with other expenses such as road tax and insurance, the expected on-road price would still approximate USD 40,000, equating to about Rs 35-40 lakh, news agency ANI reported on February 22 by global market capital firm CLSA.
Tesla Will Not Dominate India’s EV Market.
Tesla’s affordability regarding price becomes a challenge for Elon Musk to sustain in the Indian market, dominating local EV manufacturers. As the report further says regarding this, in case the Elon Musk-led EV maker positions Model 3 at a price 20-50% higher than domestic EV models like the Mahindra XEV 9e, Hyundai e-Creta, and Maruti Suzuki e-Vitara, it is unlikely to disrupt the Indian EV market significantly.
Even if Tesla opts to introduce a budget model priced below Rs 25 lakh on-road and captures a portion of the market, the report suggests that the recent drop in Mahindra & Mahindra’s stock already reflects this potential scenario, the global capital market firm added.
Further analysis discloses that Tesla’s entry would not have a significant impact on major Indian automakers, as the overall penetration of EVs in India remains lower than in China, Europe, and the US.
One example explains it well, the report draws a parallel with the Indian motorcycle industry, noting that Harley-Davidson’s X440, which is priced about 20 percent higher than the Royal Enfield Classic 350, has only managed to sell around 1,500 units per month, while the Classic 350 boasts monthly sales of approximately 28,000 units.
This illustrates the significant price sensitivity of Indian consumers, making it difficult for Tesla to gain a foothold without competitive pricing, CLSA said.
Ultimately, Tesla’s success in the Indian market hinges on its willingness to invest significantly in local manufacturing. Without such investments, even with reduced import duties, Tesla’s vehicles may remain unaffordable for a large segment of the Indian population, the report underlined.
Tesla Will Have to… To Compete with Indian EV players.
Elon Musk’s Tesla will have to build manufacturing facilities, to proving competitive pricing. The report emphasizes, that for Tesla to offer more competitive pricing and scale its operations, it must establish a manufacturing facility in India, even with the benefits of reduced import duties.
According to the report, under India’s electric vehicle policy, Tesla could enjoy a lower import duty of 15 percent on up to 8,000 units annually if it invests over Rs 4,150 crore in creating a local facility
Planning To Launch In Delhi and Mumbai.
In the upcoming months, Elon Musk’s electric vehicle (EV) firm Tesla is determined to launch its models in both Mumbai and Delhi. The company has started hiring in India, indicating an important step towards its long-anticipated entry into the domestic market.
On February 18, the firm listed a job hiring on LinkedIn for the position of Consumer Engagement Manager in the Mumbai Metropolitan Region.
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