With global sales slowing and India’s new EV policy in place, Tesla reconsiders its entry
February 21, 2025: Why Tesla is Eyeing India Again
After two failed attempts, Tesla is once again exploring entry into the Indian market, spurred by a favorable new EV policy and declining global sales. CEO Elon Musk recently met Prime Minister Narendra Modi, and reports suggest Tesla is preparing to import vehicles from its Berlin plant while scouting for local factory locations. However, no official confirmation has been made.
Also Read: Donald Trump Calls Tesla’s India Expansion “Very Unfair” Amid EV Policy Shift
India’s EV import policy, introduced in March 2024, allows reduced customs duty of 15% for manufacturers investing $500 million and committing to local production within five years. Tesla has already been sourcing $1 billion worth of auto components from India, but will it commit to local manufacturing?
Global Challenges Push Tesla Towards India
- Falling Sales: Tesla is witnessing significant sales declines—59.5% drop in Germany, 63.3% in France, and 11.5% in China in January 2025.
- Aging Model Line-up: With a lack of new launches and production delays, Tesla faces stiff competition from BYD, Volkswagen, Hyundai, and luxury brands like BMW and Mercedes-Benz.
- Regulatory Issues: Cybertruck has faced major regulatory hurdles in the UK, Japan, and EU, leading to uncertainty over its future success.
Also Read: Tesla Begins Hiring in India After PM Modi-Elon Musk Meeting: Know More
Challenges Tesla Will Face in India
- Pricing Concerns: Even with reduced import duties, the Tesla Model 3 would cost around ₹44.2 lakh (ex-showroom)—making it a luxury vehicle in India. Without local production, its price could soar past ₹65 lakh, limiting its appeal.
- Lack of Supercharger Network: Tesla’s global success relies on its fast-charging infrastructure, which is currently non-existent in India.
- Luxury EV Market is Small: Mercedes-Benz India sold only 800 EVs in 2024—Tesla may struggle to meet the 8000-unit per year cap for duty exemptions.
What’s Next? Can Tesla Make It Work?
- Tesla’s 13 new job listings in Delhi & Mumbai signal serious intent.
- A Tesla factory in India would boost EV infrastructure & supply chain, attracting high-end component players.
- Tesla’s low-cost ‘Model 2’ (under ₹21 lakh) is still years away, raising doubts over its long-term strategy.
If Tesla commits to manufacturing and charging infrastructure, it could disrupt the Indian EV market. Otherwise, this could be another false start for the world’s most hyped EV brand.
Also Read: PM Modi to Meet Elon Musk in Washington: Tesla’s India Entry Likely to be Discussed
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Tesla India plans, Tesla Model 3 India, Tesla factory in India, Elon Musk India visit, Tesla EV imports, Indian EV market, luxury electric cars India, Tesla supercharger network, Tesla sales drop, Tesla vs BYD, Tesla Model 2 India, EV policy India, Tesla factory location.