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Tesla’s much-anticipated entry into the Indian market remains unclear as high import duties continue to pose a significant challenge for the EV giant. During the company’s Q1 2025 earnings call, Tesla CFO Vaibhav Taneja described India as a “hard market” and said the company is taking a highly cautious approach. According to Taneja, importing a Tesla vehicle into India incurs a 70% import tax and a 30% luxury tax, effectively doubling the car's cost for Indian customers.
Currently, Tesla has no immediate plans to set up manufacturing in India and has stated that no new production lines will be established globally until it approaches 3 million vehicle sales. However, the company sees strong potential in India and is considering a strategy shift with the launch of its low-cost variants expected in June 2025. Industry experts believe Tesla might enter the Indian market if the government offers import duty concessions, even without a commitment to local manufacturing.
Despite the regulatory hurdles, Tesla has begun laying the groundwork for its India presence. The company has secured showroom spaces in Mumbai’s Bandra Kurla Complex and Delhi’s Aerocity, each around 5,000 square feet. The Mumbai lease was finalized in February 2025 for five years, and Tesla has already started hiring for sales and operations roles in the country.
CEO Elon Musk recently confirmed his plans to visit India in 2025 following a conversation with Prime Minister Narendra Modi. While their discussion focused on innovation and technological collaboration, no formal announcement was made regarding Tesla’s market entry. For now, the timeline of Tesla’s debut in India hinges on the government's new EV policy and potential changes in import duty regulations.
