Tesla’s Grand Entry into India Begins with Model Y and Showrooms in Mumbai & New Delhi

What you need to Know

• Tesla is officially launching in India with its first showrooms opening in Mumbai (mid-July) and New Delhi.

• The company has imported its first batch of Model Y SUVs from Tesla’s Shanghai Gigafactory.

• The price of Model Y in India could exceed $56,000 due to high import duties and surcharges.

• Tesla aims to attract high-income buyers by opening showrooms in luxury business districts.

• Tesla’s India debut could boost the local EV ecosystem and encourage global EV players to enter.

---

Tesla Inc., the global electric vehicle (EV) industry leader, is finally ready to make official inroads in India this July, a significant milestone after several years of rumors, talks, and hype. According to a Bloomberg report based on insiders, Tesla's maiden showroom will be launched in Mumbai by mid-July, with another one opening shortly thereafter in New Delhi, officially ushering the EV behemoth into the world's third-largest auto market.

Tesla's Arrival in India

The process of Tesla's entry into India has been a long and rocky one. Elon Musk, the CEO of Tesla, has expressed interest in India for quite some time now, but the high import duties and the absence of local manufacturing deals continued to keep delaying the plans. The actual turning point came a few months earlier when Musk met with Indian Prime Minister Narendra Modi in the US. According to reports, this meeting set the stage for Tesla's official entry, including the firm preparing to open showrooms and start selling.

As per records and sources accessed by Bloomberg News, Tesla has already sent its first batch of cars – namely Model Y rear-wheel drive SUVs – from its Shanghai Gigafactory to Mumbai. This isn't merely an EV; it's also the world's top-selling electric vehicle at the moment, indicating Tesla's plan to enter the Indian market with a robust, globally popular product.

First Showrooms in Luxury Precincts

Tesla's first major showroom in Mumbai is likely to be operational by mid-July, followed by another one in New Delhi, the capital city. These are not run-of-the-mill outlets; the showrooms are situated in upscale business hubs, carefully positioned to target high-net-worth customers and rich car buyers.

Tesla is also bringing in Supercharger parts, accessories, merchandise, and vehicle spares from the US, China, and the Netherlands to aid operations and deliver a premium brand experience from day one.

Premium Pricing Strategy

Entering India is not without its hurdles for Tesla. Reports indicate that five Model Y units already arrived in Mumbai, each valued at ₹2.77 million (~$31,988). These imports came with over ₹2.1 million worth of import duties, which translates well with India's high 70% tariff on fully-built imported cars under $40,000. After considering taxes, duties, insurance, and margin, the last price should exceed $56,000 (more than ₹46 lakh) – far above its American equivalent, where this same model retails at $44,990 (or $37,490 with tax credits).

This high price point could be the biggest hurdle. India is a cost-conscious market, where EVs constitute a mere 5% of new car sales and premium vehicles a mere less-than-2% of that portion. Tesla will have to balance the high price with unparalleled performance, technology, infrastructure, and customer service to make a mark.

Tesla's Strategic Expansion Plans

Tesla's entry in India is more than a single import of cars. It's actively building a strong ecosystem:

• Hiring is progressing department-wise, including for charging infrastructure, retail sales, and government policy.

• It's renting warehousing in Karnataka, a state with an electronics-centric ecosystem and policies that are pro-EV.

• It's also expanding its Gurugram operations, close to New Delhi, implying scalability in the future and a possible northern distribution center.

• Top executives from Tesla's international offices are said to be flying into India on a weekly basis to monitor development in New Delhi and Mumbai.

The activity highlights Tesla's long-term interest in India and to capture a strong operational presence.

What's Next for Tesla India?

Although Tesla has not named a new country head since the departure of Prashanth Menon, the company is not taking it easy. The recent actions seem to be part of an overall market-testing process, where Tesla is learning about consumer feedback towards its luxury EV product, the viability of logistics, and the policy climate before taking a decision on bigger-scale operations even local manufacturing or assembly down the line.

Further, the Model Y is only the start. After Tesla gauges the marketplace reaction, it is likely to introduce other models, perhaps starting with the Model 3, as well as even future entries such as the Cybertruck or entry-level EVs as mentioned in its global strategy.

Tesla's foray into India's showrooms is a defining moment for the nation's EV revolution. The arrival of the globally most recognized EV brand will not only draw international eyeballs but may even trigger innovation, infrastructure development, and competition in the Indian EV market.

Although government policies and pricing are still major challenges, Tesla's arrival is a positive indication of India's increasing significance in the global automobile market. Tesla's success in India will most likely open doors for further global EV giants to arrive on its shores.