Tesla is looking to enter the Indian market with an affordable electric vehicle (EV), and many Indian customers are excited to buy one.
Whenever a Tesla car is spotted testing on Indian roads, the media quickly talks about the possibility of a launch.
Despite all the excitement, it’s still unclear if Tesla will actually sell its cars in India. This leads to the question: why is Tesla testing its vehicles in the country?
Why Are There No Tesla Cars in India Yet?
Tesla wants to launch its EV in India, and that is why the company has been testing cars here since 2019, but they haven’t got the necessary approval from the government.
The Indian government is not against Tesla, but there are several reasons why the company hasn’t started selling cars in India yet. One of the major reasons is the high import tax, which can be as much as 100% on fully imported cars.
Tesla wanted lower import duties of nearly 40%, to understand demand before building a factory, but the Indian government insists on the “Make in India” approach first. This means Tesla would need to produce cars in India instead of importing them.
Why Isn’t Tesla Investing in India?
The government wants Tesla to set up a factory in India to create local jobs and boost production. However, Tesla is cautious because the market for high-end EVs is still small in India. The Indian government supports all car companies equally and is keen on promoting local production.
Other companies have already started selling their cars in India, while Tesla still hasn’t made its move. Additionally, Tesla is keen in countries with strong charging networks, but India’s charging infrastructure is still growing, especially for premium vehicles.
In 2022, Elon Musk tweeted that the Indian government was making things ‘very challenging’. However, India said it would welcome Tesla if they commit to making cars locally, just like other companies have done.
Latest Developments on Tesla in India
Talks between Tesla and the Indian government have started again. There are rumors that Tesla might set up a factory, and India could consider reducing some import duties for EV-related investments.
Do Indians Want Tesla?
India already has many affordable and premium EVs competing with Tesla, such as the Tata Nexon EV, Punch EV, Mahindra BE 6e, and Mahindra XUV 9e. Customers in India are enjoying advanced features in these cars.
If Tesla wants to enter the Indian market, it will likely need to build its cars in the country. Otherwise, it might have to pay 100% import tax on cars.
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