Tesla Car Price in India May Drop After Import Duty Cut, Report Says

Photo : AP

Tesla, the famous electric car company owned by Elon Musk, is getting ready to start selling cars in India. But even after the Indian government lowers the tax on imported cars, Tesla cars will still be very costly.

A report by CLSA, a global financial company, says that the cheapest Tesla car in India will cost around ₹35 to ₹40 lakh. Right now, Tesla's least expensive car, the Model 3, costs about $35,000 (₹30.4 lakh) in the United States. Even with the lower tax of 15-20% in India, plus extra costs like road tax and insurance, the final price in India will be close to $40,000 (₹35-40 lakh).

The report also says that Tesla may not affect the Indian electric car market much. Many local companies, like Mahindra, Hyundai, and Maruti Suzuki, are already making electric cars at much lower prices. If Tesla sells its Model 3 at a price 20-50% higher than these brands, it may not get many buyers. Even if Tesla launches a cheaper car under ₹25 lakh, it may not be a big problem for Indian carmakers.

Tesla has started hiring people in India. On February 18, the company posted a job offer on LinkedIn for a Consumer Engagement Manager in Mumbai. Tesla is expected to start selling cars in Delhi and Mumbai soon.

The report says that for Tesla to sell cars at lower prices in India, it must build a factory in the country. Even with the tax reduction, importing cars will still make them costly. If Tesla invests ₹4,150 crore in India, it can get a lower tax of 15% on 8,000 cars per year, making them slightly cheaper.

The report compares Tesla’s situation with the bike market in India. Harley-Davidson’s X440 bike, which is 20% costlier than the Royal Enfield Classic 350, sells only 1,500 bikes a month, while Royal Enfield sells about 28,000 bikes. This shows that Indian buyers care a lot about price. If Tesla cars are too costly, not many people may buy them.

In the end, Tesla will have to decide if it wants to invest in India. Without a factory in the country, even with lower taxes, Tesla cars will still be out of reach for most Indian customers.

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