Tesla’s India Launch: Premium Prices, Import Duties, And A Cautious Entry

Tesla is finally entering the Indian market with a showroom launch in Mumbai on July 15, ending years of speculation about when the electric vehicle maker would establish a presence in the world’s third-largest auto market.

The company’s first experience centre, a 4,000 square-foot space at Jio World Drive in Bandra Kurla Complex, will showcase Tesla’s vehicles and technology, though test drives and deliveries won’t be available initially. The opening marks a cautious entry for Tesla, which has imported nearly $1 million worth of vehicles and accessories ahead of the launch, primarily from China and the United States.

Among the imports are six Model Y SUVs – five standard range versions valued at $32,500 each and one long-range variant at $46,000. These vehicles will face India’s steep import duties of 70-100%, significantly inflating their final retail prices in a market where Tesla has no immediate plans for local manufacturing.

The company’s hesitation to build cars here is notable. Last year, Elon Musk was supposed to visit India and announce a $2-3 billion investment. He cancelled the trip. Now Tesla’s here, but only as an importer—an expensive proposition in a country with 70-100% duties on foreign EVs.

Tesla’s India launch comes at an odd time. The company’s shares are down 23% over six months, demand is slowing globally, and they’re sitting on excess production capacity. Yet here they are in India, importing cars at massive duties instead of manufacturing locally to keep prices reasonable.

Operations are currently being overseen by Tesla’s China team following the resignation of India head Prashanth Menon last month. No successor has been announced. The company has established four sites across India: the Mumbai showroom, a service centre in Kurla West, an engineering hub in Pune, and its registered office in Bengaluru.

Tesla’s been hiring locally for sales, service, supply chain, and autonomous driving roles. But without local manufacturing, they’ll likely stay a luxury brand for the wealthy rather than a real player in India’s growing EV market.

The Mumbai showroom is Tesla dipping its toe in Indian waters – enough to see what happens, but not enough to really commit. After years of the government trying to woo them with policy changes and incentives, this feels underwhelming.

Whether Tesla eventually builds cars here or keeps treating India as a side market depends on two things: how many people are willing to pay luxury prices for their EVs, and whether Tesla’s global troubles push them to reconsider their strategy in growing markets like India.