Tesla India entry: US electric vehicle (EV) giant Tesla is gearing up for its Indian debut, scouting potential showroom locations in New Delhi and Mumbai, news agency Reuters reported, quoting sources familiar with the discussions. This move comes amidst a decline in Tesla's global vehicle deliveries in Q1 2024, prompting a push for expansion into new markets.

Showrooms and service hubs planned

According to the report, Tesla has plans for initial showrooms in both cities, each spanning 3,000 to 5,000 square feet and accompanied by a dedicated service hub. This aligns with the recent production shift at Tesla's German plant, now manufacturing right-hand drive vehicles specifically for the Indian market.

Favourable policy landscape

India's recent policy change, slashing electric vehicle import taxes to 15 per cent for companies investing over $500 million and setting up factories, has created a conducive environment for Tesla's entry. This news comes on the heels of a potential investment announcement and a meeting between Tesla CEO Elon Musk and Prime Minister Narendra Modi, expected during Musk's upcoming visit to India.

Aggressive timeline and market challenges

Tesla executives have already begun scouting locations and engaging with real estate developers to identify suitable high-street and mall sites. The company aims to expedite construction and open showrooms by the end of 2024. However, Tesla faces challenges beyond logistics. The company is grappling with slower growth in its existing markets – the US and China. Additionally, the cancellation of a planned, more affordable electric vehicle could potentially impact mass-market growth aspirations.

India's booming EV market

Despite these hurdles, India's booming electric vehicle market presents a significant opportunity. While electric vehicles currently account for a mere 2 per cent of India's total car sales, the government has ambitious plans, aiming for 30 per cent of all new car sales to be electric by 2030. Tesla's entry into the Indian market is poised to be a significant development, potentially shaping the future of electric mobility in the world's third-largest auto market.

(With Reuters inputs.)