In April 2016, Tesla’s CEO Elon Musk invited Indian customers to preorder the Tesla Model 3 with a $1,000 deposit. Vishal Gondal, a Mumbai-based entrepreneur and CEO of health-tech startup GOQii, was among the first to place an order. However, after years of waiting, the promised vehicle never arrived.
Gondal, a longtime fan of Musk, was initially excited about the prospect of owning a Tesla, despite uncertainties regarding the car’s launch date and final price in India. But as years passed without any updates from Tesla, Gondal eventually gave up and purchased an electric SUV from Audi instead. In January 2023, after six years of waiting, he managed to get his deposit refunded, thanks to a friend who helped him contact a Tesla sales manager in India.
Tesla’s failure to deliver on its promise has left many Indian customers disappointed. The company initially delayed its entry into the Indian market, citing high import duties and concerns over production costs. Despite India being the world’s third-largest auto market, Tesla has struggled to find a viable business model in the country, where the average car price is around $14,000—significantly lower than the $40,000 price tag of a Tesla Model 3 in the U.S.
Other luxury automakers, including Audi and Mercedes Benz, have since entered the Indian EV market, offering vehicles that cater to local tastes and budgets. This shift has further diminished Tesla’s appeal in India.
In response to the competitive pressures and India’s protective import policies, the government reduced import duties to 15% for electric vehicles priced under $35,000 in March 2024. However, this reduction is contingent on automakers committing to build manufacturing facilities in India within three years. Musk has previously expressed concerns that even with these reduced duties, Tesla vehicles might still be too expensive for the Indian market.
Despite these challenges, Tesla’s plans for India remain uncertain. Although Musk hinted at the development of a more affordable $25,000 model, expected to launch by 2025, there has been little clarity on whether Tesla will establish a factory in India or how it plans to navigate the country’s complex market dynamics.
The Indian EV market, while growing, is still in its early stages. In 2023, electric vehicles accounted for just 2% of total car sales, with Tata Motors leading the market. Chinese automaker BYD has also made significant inroads, ranking among the top five EV brands in India.
Industry experts believe that for Tesla to succeed in India, the company would need to build cars locally to keep prices competitive. Additionally, Tesla would have to establish a robust dealership network and charging infrastructure to compete with established luxury brands.
As of now, Tesla’s future in India remains in limbo. Indian officials have expressed frustration over the lack of communication from Tesla, with one senior bureaucrat remarking in a recent TV interview that they “really don’t know” what Tesla’s plans are for the country.
