Tesla is intensifying its efforts to establish a significant presence in the Indian market, focusing on both retail and manufacturing initiatives.
Retail Expansion Plans
Tesla’s long-standing demand for India to lower import duties on EVs – which currently stand at nearly 100% has been a major roadblock. While Musk has repeatedly pushed for tariff reductions, Indian automakers have resisted, fearing competition could disrupt the local EV market.
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However, the company is now actively recruiting for its planned mega store in Mumbai, with job postings for 13 positions, including roles in vehicle service, sales, customer support, and operations. This hiring spree indicates Tesla’s commitment to setting up a substantial retail footprint in India’s financial hub.
In addition to Mumbai, Tesla has identified a showroom location in New Delhi’s Aerocity, near the international airport. Both showrooms, each approximately 5,000 square feet, will focus on selling imported electric vehicles and are not intended to function as service centers. Although Tesla’s showroom launch is imminent, the timeline for selling vehicles remains unclear.
Manufacturing Prospects and State-Level Competition
While Tesla has scouted locations around Pune, no land has been finalised for manufacturing facilities. Several Indian states, including Maharashtra and Gujarat, are competing to host Tesla’s manufacturing hub. Preferred sites include Maharashtra’s Chakan and Chhatrapati Sambhaji Nagar (Aurangabad). The Tamil Nadu government has also shown interest, leading to speculation about Tesla’s potential investment destinations.
Engagement with Indian Government
Tesla officials are scheduled to visit India in April to meet with the Prime Minister’s Office and other ministries. These discussions aim to navigate regulatory frameworks and explore potential incentives for Tesla’s market entry. To benefit from import duty relief, Tesla will need to apply under the Government of India’s scheme, which offers reduced import taxes to companies committing significant investments in local manufacturing.
Investment Plans
Reports suggest that Tesla may invest between $3 to $5 billion initially in its Indian operations. This investment would align with India’s electric vehicle policy, which requires a minimum investment of ₹4,150 crore (approximately $500 million) and achieving 50% domestic value addition within five years to qualify for reduced import duties.