With Elon Musk-led Tesla is planning to enter the Indian market, the cheapest car of the company will cost around ₹35-40 lakh even after a reduction in the import duty to below 20 per cent, ANI quoted a report by global capital market firm CLSA.
According to the report, Tesla’s cheapest Model 3 in the American market costs around $35,000 (approximately ₹30.4 lakh) at the factory level.
If the expected reduction in import duties to 15-20 per cent in India is carried out, along with additional costs like road tax and insurance, the car’s on-road price would still be around $40,000 ( ₹35-40 lakh).
The report further stated that in case the Elon Musk-led EV maker positions Model 3 at a price 20-50% higher than domestic EV models like the Mahindra XEV 9e, Hyundai e-Creta, and Maruti Suzuki e-Vitara, it is unlikely to disrupt the Indian EV market significantly.
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According to the CLSA report, even if Tesla decides to launch an entry-level model priced below ₹25 lakh on-road and gains market share, the recent decline in Mahindra & Mahindra’s stock is already factoring in this scenario.
Tesla’s entry would not have a significant impact on major Indian automakers, as the overall penetration of EVs in India remains lower than in China, Europe, and the US.
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Tesla to launch models in Delhi and Mumbai
In the coming months, Tesla would launch its models in Delhi and Mumbai. The firm has begun hiring in India, marking significant step towards its long-anticipated entry into the domestic market.
On February 18, the electric vehicle giant posted a job listing on LinkedIn for the position of Consumer Engagement Manager in the Mumbai Metropolitan Region.
The report also outlined that Tesla would need to set up a manufacturing facility in India to make its cars more affordable and scale up its operations, even if import duties are reduced to below 20 per cent.
The report highlighted that under India’s electric vehicle (EV) policy, Tesla could benefit from a lower import duty of 15 per cent on up to 8,000 units per year if it invests over ₹4150 crore billion in setting up a local facility.
