Tesla Model 3 will cost at least ₹35 lakh in India even with reduced import duty, claims report

As Tesla has restarted its India operations by posting hiring advertisements for multiple positions, it has reignited speculation about entering the country officially. Interestingly, the development came almost immediately after Prime Minister Narendra Modi met Tesla CEO Elon Musk during the former's recent visit to the US. While the possibility of a ₹21 lakh Tesla car that is likely to launch in India has been making major headlines, the current cheapest car from the OEM, Tesla Model 3 will cost at least ₹35 lakh in the country, claims a report.

According to a report by CLSA, a global capital market company, even with reduced duty to below 20 per cent, the Tesla Model 3 will cost around ₹35 lakh to ₹40 lakh. Currently, Tesla's cheapest EV Model 3 costs around $35,000 in the US, which translates to approximately ₹30.4 lakh. With an expected reduction in import duties to 15-20 per cent in India, along with additional costs such as road tax and insurance, the on-road price of the Tesla Model 3 in India would still be around ₹35-40 lakh.

The report also claims that with this pricing slab, Tesla won't be able to disrupt the Indian EV market significantly. If Tesla positions the Model 3 at a price 20-50 per cent higher than domestic EV models like the Mahindra XEV 9e, Hyundai Creta Electric, and Maruti Suzuki e-Vitara, it is unlikely to disrupt the Indian EV market significantly, claims the report. It also claims that Tesla's entry would not have a significant impact on major Indian automakers, as the overall penetration of electric vehicles in India remains lower than in China, Europe, and the US.

Tesla aims to open showrooms in Delhi and Mumbai

Tesla in the coming months would be opening its showrooms in Delhi and Mumbai. The EV maker has officially begun its hiring process in India, marking a significant step towards its long-anticipated entry into the country's passenger vehicle market. On February 18, Tesla posted a job listing on LinkedIn for 13 different roles.

Tesla must invest over ₹4,150 crore to get lower import duty benefits

The report also outlined that Tesla would need to set up a manufacturing facility in India to make its cars more affordable for the market and scale up its operations, even if import duties are reduced to below 20 per cent. The report further highlighted that under India's EV policy, Tesla could benefit from a lower import duty of 15 per cent on up to 8,000 units per year if it invests more than ₹4150 crore in setting up a local facility.

Overall, Tesla's entry into the Indian market depends on whether it is willing to make a significant investment in local manufacturing. Without it, even with reduced import duties, Tesla's cars may remain out of reach for a large portion of Indian buyers, stated the report.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.