Elon Musk, Tesla CEO, confirmed via a Tweet today that the brand will launch in India “next year for sure”. It is to be noted that earlier last week, a report emerged of a Tesla India R&D center that would come up in Bengaluru, Karnataka, however, the recent tweet from the CEO himself confirms the arrival of Tesla cars in the country.
Reports of Tesla entering India has been doing rounds for over half a decade now. In September 2015 Prime Minister Narendra Modi visited Tesla’s facility in California, USA and met Musk, in a move to promote Make-in-India when Tesla was looking for a place to build its first manufacturing facility outside America. However, Tesla could have been put off by the high taxes, and bureaucratic red tapes in place before the government improved the ease of doing business the following years.
When Tesla India launches, it will definitely have to manufacture with a decent degree of localization if it wants to see significant volumes, and not be a niche player. Tamil Nadu’s Chief Minister, Edappadi Palaniswamy visited Tesla in September 2019, as part of a three nation tour to woo companies to setup operations in Tamil Nadu, which is home to automakers such as Daimler, Ashok Leyland, Hyundai, Ford, Royal Enfield, BMW, Yamaha, PSA, TVS, Ather Energy and Renault-Nissan.
It is unclear which of Tesla models will be initially available in the country. However, going by trends, the Tesla Model Y, Tesla Model X (which are SUVs) and the entry level Tesla Model 3 are sure to be made available for the Indian market. The Tesla Model S could be launched too, however it remains to be seen if the upcoming Tesla Cybertruck or Tesla Roadster would be available to order for Indian Tesla enthusiasts.
The Tesla Model 3 price in India could range from INR 40-50 lakhs, ex-Showroom, which would pit it against the BMW 3 Series and Mercedes C Class, which are its competitors in the USA as well (on price). Looking at the long term though, the future Tesla Model 2, which will slot in the sub-30 lakh price (if localized) could be a key driver for the brand in India. Local collaborations would be a good way for Tesla to launch cars for around USD 15,000 (INR 11 lakh) if it intends getting there quickly.
Elon Musk announced at the Battery Day event last month that the upcoming entry-level Tesla car price will be USD 25,000 (INR 18 lakhs), and its market introduction would take 3 years. It will use a Iron-based long cycle life battery capable of repeated charge and discharge cycles.
It remains to be seen though if Tesla in India opts for a dealership type setup for retail, or it follows the direct sales channel it uses in globally.