The cheapest model at ₹35-40 lakh on-road

Elon Musk’s Tesla is set to make its long-awaited debut in India, but even with reduced tariffs, owning a Tesla may still be a luxury for many. A report by global capital market firm CLSA suggests that despite the government’s decision to lower import duties to 15-20%, Tesla’s entry-level model will remain significantly more expensive than its domestic competitors.

Tesla Pricing in India: Still a Costly Affair?

According to CLSA, even with reduced import tariffs, the cheapest Tesla model—expected to be the Model 3—will cost around ₹35-40 lakh on-road. This price accounts for import duties, road tax, insurance, and other additional costs. In contrast, Tesla’s Model 3 starts at approximately $35,000 (₹30.4 lakh) in the U.S. at the factory level, making it more affordable in its home market.

Competing Against Domestic EV Giants

Tesla’s higher price tag could make it difficult for the company to disrupt India’s growing EV market, where homegrown brands like Maruti Suzuki, Mahindra, and Hyundai have already captured a strong customer base. Models like the Mahindra XEV 9e (starting at ₹21.90 lakh), Maruti Suzuki e-Vitara (₹17-22 lakh), and Hyundai Creta Electric (₹17.99 lakh) are priced significantly lower than the expected cost of the Tesla Model 3.

Even if Tesla introduces a more budget-friendly model under ₹25 lakh, analysts believe it may not drastically shift market dynamics. Mahindra & Mahindra’s recent stock fluctuations already reflect expectations of Tesla’s arrival, signaling the industry’s awareness of potential competition.

The Need for Local Manufacturing

Industry experts suggest that Tesla will need to establish a manufacturing plant in India to bring down costs and improve affordability. Even with reduced import duties, local production remains the key to Tesla’s long-term success in the Indian market.

Tesla’s Hiring Spree in India

Despite pricing concerns, Tesla has begun laying the groundwork for its Indian operations. The company recently posted job listings, including a Consumer Engagement Manager role for its Mumbai office. With a total of 13 job openings, Tesla is making its presence felt as it gears up to launch in major cities like Mumbai and Delhi in the coming months.

While Tesla’s arrival is generating buzz, its success in India will largely depend on pricing strategies and local production plans. Will Tesla make the necessary moves to become a mainstream player, or will it remain a luxury choice for select buyers? Only time will tell.