No affordable model, no market penetration

Tesla’s highly anticipated entry into the Indian market is generating buzz, but analysts warn that the EV giant may struggle without local manufacturing. Initial speculation suggested that Tesla was scouting locations for a production facility, but recent reports confirm that the company will instead import vehicles from its Berlin plant in Germany.

No Budget-Friendly Tesla for India?

While rumors have circulated about a sub-Rs 25 lakh Tesla EV, experts believe this is unlikely. Without an Indian production base, scaling operations and achieving competitive pricing will be challenging.

Currently, the most affordable Tesla, the Model 3, is priced at just under $30,000 (approximately Rs 29.79 lakh) with a proposed 15% import tariff. Analyst Kumar Rakesh of BNP Paribas India highlighted that Tesla plans to introduce an affordable Model 3 or Model Y variant in late 2025, with a post-subsidy price of $30,000 in the U.S. However, considering a 15% customs duty, the price remains steep for mass-market adoption in India.

Tesla’s Struggles in Europe

Tesla is also facing headwinds in Europe, where its sales have taken a sharp downturn. Bloomberg reports a 45% drop in Tesla’s European sales, with only 1,277 units sold in Germany—the lowest since 2021. In France, sales plummeted 63%, reaching their lowest level since August 2022. Meanwhile, the European Automobile Manufacturers’ Association noted a 37% surge in overall EV sales across the continent, indicating that competitors are gaining ground.

To counteract these setbacks, Tesla is focusing on its Gigafactory in Berlin, shifting production priorities toward the new Model Y. The company expects this model to play a crucial role in regaining traction in the European market.

The Road Ahead

For Tesla to succeed in India, analysts stress the need for a locally manufactured, cost-effective model. Without it, the company may struggle to achieve significant market penetration.