Tesla and the Indian Government have been working overtime to ensure that the Elon Musk-led company enters the domestic market soon. The California-based company has already posted job openings on its official LinkedIn page. Reports indicate that the government is set to introduce new changes to direct import tariffs on electric vehicles. What’s particularly interesting is that, despite the silence from domestic EV players regarding Tesla’s India entry, Indian manufacturers remain confident in the strength of their made-in-India products. Express Drives reached out to Kia, Tata Motors, and Audi, but all declined to comment on Tesla’s entry into India, stating they do not comment on companies that have not yet officially entered the market.
Will Tesla affect Indian EV market?
Tesla plans to initially import its electric vehicles from its Berlin plant. Based on the current 110 per cent import tariffs, the vehicles sold in the domestic market will fall in the luxury segment in the Indian market. According to an Economic Times report, a new proposed EV policy will allow manufacturers to set up assembly facilities at existing plants reducing the import duty to just 15 per cent, provided they meet the requirement of achieving a turnover of Rs 2500 crore within the first two years of operations. Additionally, companies would need to invest approximately Rs 4150 crore, excluding costs for land or buildings, to qualify for these benefits.
If this new policy gets a nod then Tesla vehicles could start from Rs 21 lakh onwards, which will go up against top models from Mahindra and Tata Motors.
Mahindra’s response to Tesla threat
Recently, Anand Mahindra, Chairman of Mahindra and Mahindra, responded to an X user’s query about how the Indian automaker plans to challenge Tesla, doing so in his signature suave style, Mahindra replied — We have been asked similar questions ever since the opening up of the Indian economy in 1991. How will you compete against: Tata, Maruti, All MNCs? But we’re still around. And working like maniacs to still be around & relevant even a century from now. With you cheering us on, we will make that happen…
Managing Director and CEO Anish Shah emphasized that in recent years, domestic manufacturers have significantly strengthened their position and can compete with international brands. With India being a manufacturing hub, global companies will struggle to match the scale and cost efficiency of domestic firms, especially as electric vehicles are now fully manufactured in India.
Other leading Indian automobile manufacturers have remained silent about Tesla’s entry into India. Express Drives spoke to experts about the potential impact of Musk’s EV company on domestic players. Gaurav Vangaal, Associate Director of LVP Forecasting at S&P Global Mobility, noted, “It depends on the segment and vehicle Tesla chooses, but it will definitely impact the competition. Tesla has a strong brand appeal in the Indian market.”
