Elon Musk may officially sell his first Tesla car in India within the next 2-3 months. CNBC-TV18 has learned that the Tesla team has started the process of certification and homologation in India to begin selling its Electric Vehicles (EVs) in the country. However, as of now, there are no plans to manufacture vehicles locally.
Reports suggest that Tesla has finalised a five-year lease for a 4,000 square-foot space in Mumbai’s Bandra Kurla Complex to establish its first showroom in India.
Sources indicate that Tesla and Musk are awaiting clarity on whether India will reduce import duties on automobiles and auto components before making a final decision on the timing. Lower tariffs have been a key request from US President Donald Trump’s administration, and Musk has also advocated for them. Both Trump and Musk have publicly stated that doing business in India—especially manufacturing—is difficult due to high tariffs.
In light of this development, Daniel Ives, Global Head of Tech Research at Wedbush Securities, told CNBC TV18 about Tesla’s promising prospects in India. He believes the country could become a major market for the company over the next five to ten years, drawing inspiration from Apple’s successful strategy in the region. “We’ve always thought India was going to be a very strong market for Tesla. I think it has really taken a page out of the Apple playbook there,” Ives stated. He views Tesla’s push into India as a savvy move, aligning with the company’s broader global ambitions.
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A key part of this strategy, Ives emphasised, is Tesla’s focus on affordability, particularly with its upcoming low-cost car. He anticipates this model will debut by the summer, with another potentially following later in the year, both designed to drive widespread demand.
The topic of lowering import tariffs on luxury cars was discussed when Prime Minister Modi visited the US to meet with President Trump and Elon Musk in February. CNBC-TV18 reported that India is reviewing import tariffs on about 30 products, including luxury cars, but may not reduce tariffs to zero.
While US and Musk may be wanting zero duties on electric cars being exported to India, sources say the government may find it difficult to provide such a concession. India is also negotiating Free Trade Agreements with EU and UK and would have to offer the same duty cuts to these nations as well. Tariffs vary depending on whether the vehicles are brought in as completely knocked down (CKD) units, meaning cars are shipped in parts and assembled in India, or as completely built up (CBU) units, where the cars are sold intact after import.
Tesla is not the only automaker waiting for clarity on tariffs. Foreign carmakers, including Korean manufacturers like Hyundai and Kia, and European manufacturers like the VW Skoda Group, are also awaiting a final decision before applying for India’s new Electric Car Manufacturing Policy. The guidelines for this policy are still pending approval.
Hyundai India told CNBC-TV18: “The Government is encouraging localisation and electrification in the automotive sector through policies such as the Production Linked Incentive (PLI) scheme for Automotive Technology, PLI for Advanced Cell Chemistry, Phased Manufacturing Program, Atmanirbhar Bharat, PM E-DRIVE, and Make in India. The Government is currently in discussions with the industry to roll out a program for widespread EV manufacturing and adoption. HMIL has been manufacturing in India for over 26 years and welcomes any initiatives that promote local manufacturing, offer innovative and safe mobility solutions, and create jobs. We await the rollout of the final policy and guidelines.”
However, neither Skoda VW Group nor Kia India have responded to CNBC-TV18’s queries regarding their plans to apply for the concessional scheme.
Mercedes-Benz, meanwhile, has stated that it has no plans to seek concessions under the electric car manufacturing policy. A spokesperson told CNBC-TV18: “Mercedes-Benz has made a cumulative investment of ₹3,000 crores in its state-of-the-art manufacturing plant in Pune, which produces two world-class BEVs, in addition to multiple luxury ICE vehicles. We have sufficient capacity for current market requirements and have no immediate plans to add new BEVs to our local production portfolio.”
