How Much Will a Tesla Cost in India After Duty Cuts? Discover now:

Tesla, the renowned electric vehicle (EV) manufacturer led by Elon Musk, is poised to enter the Indian market. Recent reports suggest that even with a reduction in import duties, the starting price for Tesla’s most affordable model is projected to be between ₹35 lakh and ₹40 lakh.

Import Duty Reduction and Its Impact

The Indian government has recently reduced import duties on high-end electric vehicles. Specifically, the basic customs duty on cars priced above $40,000 has been lowered from 110% to 70%.

This policy aims to attract global EV manufacturers to the Indian market.

Despite this reduction, Tesla’s vehicles remain in the premium price segment. The Model 3, Tesla’s most affordable offering, retails at approximately $35,000 (around ₹30.4 lakh) in the U.S. After accounting for the reduced import duty, along with additional expenses such as road tax and insurance, the on-road price in India is estimated to be between ₹35 lakh and ₹40 lakh.

Tesla Market Implications

Positioning the Model 3 at this price point places it significantly higher than domestic electric vehicle models like the Mahindra XUV400, Hyundai Kona Electric, and Tata Nexon EV. This pricing strategy may limit Tesla’s market penetration, as the majority of Indian consumers are highly price-sensitive. To achieve a more competitive stance, Tesla might need to consider local manufacturing to reduce costs. Under India’s EV policy, manufacturers investing over ₹4,150 crore in local facilities could benefit from a lower import duty of 15% on up to 8,000 units annually.

Conclusion

Tesla’s anticipated entry into the Indian market marks a significant milestone in the country’s EV landscape. However, the premium pricing of its vehicles, even after import duty reductions, presents challenges in a price-sensitive market. Establishing local manufacturing facilities could be a strategic move to make Tesla’s offerings more accessible to Indian consumers and to enhance its competitiveness in the burgeoning EV sector.