Infuriated by Tesla EVs lacklustre approach to their Indian client base, many Indians who prepaid $1000 are asking to get their money back. Earlier in 2016, Tesla CEO invited Indian customers to pre-order Tesla Model 3S. However, the cars never really arrived and people are demanding their money back.
Tesla’s ambitions to sell cars in India did not quite take shape. After their promise of selling on Indian shores, many other automakers have appeared on the scene. The primary reason as to why this happened is largely debatable, but sources suggest that the imposition of taxes will make their cars very expensive for its buyers. Also, challenges of developing an Indian factory have contributed to the carmaker being absent in the country.
India is the third largest carmaker after the US and China. However, the buying capacity of Indians was estimated to be around $14,000, which is lower than $47,000 for the US making the Indian market very unique. For instance, a brand new Tesla Model 3 costs $40,000, that keeps it in luxury car territory for the Indian car buyer. Also, Indians prefer car makers that offer excellent after sales network.
Tesla is a fantastic tech company, however they are unlikely to have understood the average Indian mindset. Also, it is unknown how Tesla’s entry level offerings would compete with the likes of other luxury EVs. The Indian government had reduced import duties to 15% which was initially above 70%. This was to attract global brands like Tesla who could offer EVs cheaper than $35,000. However, the government wanted Tesla to establish its manufacturing facility in India within three years.
Tesla EVs Indian concerns
Elon Musk had expressed concerns that import duties could increase the prices of Tesla’s two times. This would make their products beyond “affordable”. Many in the country were hopeful of having a Tesla factory in April of 2016, but Musk had cancelled a much awaited trip to India at the very last moment citing Tesla operation obligations. The EV market has grown by leaps and bounds in India and so Tesla has expanded as a much more evolved brand with mega factories in China, Germany and USA.
The production plants are capable of making 2.3 million cars annually. Although production grew by 35%, the first half of 2024 saw Tesla selling only 8,31,000 vehicles across the globe. This is way lower than the 1.8 million forecast of Tesla boss ELon Musk. To enter into emerging markets like India, Tesla will require new and affordable cars. Other car makers like Chinese auto giant BYD have cemented their place in markets like India by being more competitive in the $25,000 price bracket.
India saw a surplus increase in sales of electric vehicles, but it accounts for only 2% of overall car sales. Of this Tata Motors accounted for two-thirds of the market, with Indian manufacturer Mahindra & Mahindra and BYD seeing an increase in sales. BYD currently sells three cars in the country – BYD Atto 3, BYD e6, and BYD Seal. FOr Tesla to be competitive in the Indian EV market, it has to bring a product that can be priced at $30,000. That looks to be possible if that particular model is built in India.