As Tesla faces declining sales across major markets, the electric vehicle giant is making its long-awaited entry into India, marking a strategic pivot toward one of the world's largest automotive markets.
The company has leased a showroom in Mumbai, India's financial hub, with a first-year rent of $446,000, and plans another location in Delhi. Tesla is actively recruiting for over 20 positions across sales, customer support, and product development roles in the country.
This expansion comes as Tesla experiences substantial sales drops in established markets. Germany saw a 76% decline, while Italy reported a 55% decrease in Tesla sales. The company's market capitalization has fallen by $800 billion amid growing competition and controversies surrounding CEO Elon Musk.
India presents both opportunities and challenges for Tesla. The country aims for 30% electric vehicle adoption by 2030, though EVs currently represent only 2.5% of the 4.3 million cars sold annually. Local manufacturer Tata Motors dominates with 60% market share in the electric segment.
Pricing remains a key hurdle. Tesla's Model 3, estimated to cost around $40,000 before tariffs, will compete in a market where domestic electric vehicles sell for under $10,000. Industry experts suggest Tesla will initially target luxury car buyers in major cities.
The Indian government has adjusted policies to facilitate Tesla's entry, reducing import duties on high-end EVs to 15% for limited quantities, provided manufacturers commit to $500 million in investment and local production within three years.
The timing of Tesla's India launch aligns with geopolitical factors. India's tensions with China have restricted Chinese EV makers' access to the market, potentially benefiting Tesla. The move also comes as Musk strengthens ties with both U.S. and Indian leadership, following his recent meeting with Prime Minister Narendra Modi.
For Tesla, success in India could help offset declining sales in other regions, though the company must navigate infrastructure limitations and adapt its vehicles for local road conditions. The Indian market, projected to reach $111 billion by 2029, represents a critical opportunity for Tesla's global expansion strategy.