Winning Bizness Desk

Mumbai. Elon Musk's Tesla has taken a major step toward entering the Indian market by leasing an office space in Mumbai. According to a report by Economic Times, Tesla has secured a 30-seat workspace inside a co-working facility at Phoenix Market City, Mumbai, for a monthly rent of Rs 3 lakh. Earlier, Tesla had leased a 4,003 sq ft area in Mumbai's Bandra Kurla Complex (BKC) for a new showroom, with an annual lease fee of Rs 3.87 crore. These developments suggest that Tesla’s long-awaited India entry is now closer than ever.

Talks ongoing for EV plant investments in India

Tesla is also in discussions with several Indian states, including Tamil Nadu, Gujarat, and Maharashtra, regarding setting up an electric vehicle (EV) manufacturing plant. The proposed investment could be as high as $2 billion. These negotiations are part of Tesla’s broader plan to tap into the rapidly growing Indian EV market, where demand for four-wheeler electric vehicles has more than doubled in the last year.

Tesla refunds reservation fees to Indian customers

Meanwhile, Tesla has started refunding reservation fees to Indian customers who had pre-booked the Model 3 back in 2016. The company has discontinued the Model 3 Standard Range RWD variant and now offers the Long Range version as its most affordable model. In an email to customers, Tesla mentioned that reservation fees are being refunded for now and the company will reconnect with them once India-specific plans are finalized.

India's growing EV market attracts global players

Tesla’s India move comes at a time when the EV four-wheeler market is booming. In 2023, India saw the registration of 1.47 lakh electric four-wheelers, more than double the number registered in 2022. Tesla will face stiff competition from established players like Tata Motors, Toyota, and MG Motors, who currently lead the Indian EV segment. Vietnamese manufacturer VinFast is also preparing to enter the Indian market with a $2 billion investment and a plant in Tamil Nadu.

Policy shifts create favorable conditions for Tesla

Previously, high import duties had stalled Tesla’s India plans. The Indian government was firm on not reducing import duties without a commitment from Tesla to set up a manufacturing plant. Recently, India reduced the import duty on cars priced above $40,000 from 110% to 70%, creating a more favorable environment. Additionally, a meeting between Elon Musk and Prime Minister Narendra Modi played a key role in reviving Tesla’s interest. Tesla is now reportedly planning to launch its most affordable EV yet in India, priced around $25,000 (Rs 21.7 lakh), though taxes could push its market price to approximately Rs 36 lakh.

Key Takeaways:

• Tesla leases a 30-seat office at Phoenix Market City, Mumbai.
• New showroom space is already secured at BKC, Mumbai.
• Talks ongoing with multiple states for a $2 billion EV plant.
• Refunds issued to Indian customers who pre-booked Model 3.
• EV market in India growing rapidly, doubling in a year.
• Tesla to face competition from Tata Motors, Toyota, MG.
• Lowered import duties and Modi-Musk meeting paved way for Tesla's India plans.