US electric vehicle manufacturer Tesla began hiring in last week, with the company , including for a store manager and service technicians in both the capital New Delhi and economic hub Mumbai.
The company’s announcement comes after its CEO held a one-on-one meeting with the South Asian nation’s in Washington.
, with media reports last year suggesting it was scouting for factory and showroom locations.
India’s electric car market remains small — a growth opportunity for Tesla as it struggles with the competition from and seeing its first slump in annual EV sales.
A key and promising market
India has the world’s third-largest automotive market by volume. And Modi’s government has big plans for battery-powered vehicles: They want electric cars to account for 30% of the country’s new car sales by 2030.
India could also serve as a car export hub for the region.
Still, significant challenges remain, said Shubham Mishra, founder and CEO of Battery Ok Technologies. His company specializes in advanced battery diagnostics for the EV sector.
“Tesla’s current pricing — starting at approximately $40,000 (€ 38,171) for the Model 3 — far exceeds the affordability threshold of the Indian market, where 80% of cars sold are priced below $15,000,” he told DW.
“Developing a cost-competitive model, potentially under $30,000, will be essential, with an unwavering focus on maintaining battery quality to withstand India’s extreme climates, including temperatures exceeding 40 degrees Celsius, (104 Fahrenheit)” he added.
Mishra also said that entrenched local competitors like Tata Motors — which commands 70% of India’s EV market — pose a formidable threat, while the country’s challenging road conditions demand enhanced vehicle durability.
Incentives and challenges for EV makers
India has long had high import taxes for electric vehicles, preventing Tesla from entering the market in the absence of local manufacturing.
Last year, however, India rolled out a program to promote the manufacturing of electric vehicles in the country. The policy slashed import duties on e-cars for global automakers that committed to invest $500 million and start local production within three years.
The move is seen as offering an incentive for Tesla to set up a local plant.
The policy, however, applies to all EV makers. Vietnamese automaker VinFast has already announced plans this year to spend up to $2 billion on building an electric vehicle factory in India.
Even with these ambitious plans, the country’s charging infrastructure remains a critical bottleneck.
The EV charging network in India has grown in recent years, rising from 1,800 public charging stations in early 2022 to over 16,000 by mid-2024.
But the growth falls short of what’s needed for a rapid adoption of electric mobility. Furthermore, fast charger installations and grid upgrades are expensive, deterring widespread deployment.
“This is a major and significant issue for the EV segment and Tesla has already identified these problems and hopes to work to address them by laying the groundwork for their supercharging network,” Shrijay Sheth, founder of Legalwiz.in, a top legal-tech startup told DW.
“Hopefully, Tesla’s entry into India may prove to be the proverbial catalyst that energizes the sector with much-needed impetus,” he added.
A win-win situation?
Dilip Chenoy, former director general of the Society of Indian Automobile Manufacturers, shares a similar view, saying that Tesla’s entry could accelerate EV adoption in India by bringing in cutting-edge technology, increasing consumer choice and spurring competition.
“Though challenges remain in pricing vehicles competitively for Indian consumers, meeting localization requirements, and rolling out charging infrastructure, there are other positives,” Chenoy told DW.
“This is a win-win for both Tesla and India. For Tesla, it provides a growing market and a new production base less constrained by tariffs. For India, it brings FDI, technology access, and a strengthened EV ecosystem, offering consumers more choice,” he stressed.
Edited by: Srinivas Mazumdaru
The post Tesla eyes India’s EV market but hurdles remain appeared first on Deutsche Welle.
