Even With Reduced Import Duty, Tesla Costly in India

Elon Musk’s Tesla will soon make its entry into the domestic market and the hiring process has already begun.

Even though the import duty has been reduced to under 20 per cent, the basic model of Tesla will be available between Rs 35 to 40 lakh in Indian market.

Tesla’s cheapest model costs $35,000 which is Rs 30.4 lakh in Indian currency, at the factory level in the US. Though the import duty will be below 15-20%, additional costs such as road tax and insurance will up the price to Rs 35 to 40 lakh in India.

Even if Tesla positions its basic model, Model 3, at 20-25% higher than EVs in domestic market, it is unlikely to disrupt the Indian market, say automobile experts.

They feel Tesla’s entry wouldn’t make a dent in automobile manufactures revenues in India as the overall penetration of EVs is lesser than that in countries like China, US and Europe.

Tesla is set to launch its models in Delhi and Mumbai in the coming months. The fact that it is hiring was out from a LinkedIn posting for the job of a Consumer Engagement Manager in Mumbai.

It is said that Tesla needs to set up a manufacturing unit in India to make its cars affordable and scale up its operations. It has to be noted Indians are highly price sensitive, making it a tough ground for Tesla.

Establishing a local manufacturing plant could give an edge to Tesla. If not, reduction of import duty too will keep the cars out of reach for majority Indians.