Tesla officially enters India, after years of lurking, the first store finally "lands" in Mumbai

Global electric vehicle giant Tesla (TSLA.US) has finally set its sights on India.

According to Zhitong Finance APP, after years of observation, the company under Musk will open its first showroom in Mumbai on Tuesday (July 15) in the world's third-largest automotive market. Although high import tariffs and limited resident income may suppress sales, the Indian market remains a strategic opportunity that Musk cannot afford to miss.

Currently, the situation does not seem optimistic. Data from the Indian Automobile Manufacturers Association shows that in the past 12 months ending in March, new car sales in India reached 4.3 million, but a report from JMK Research & Analytics indicates that only 111,000 (2.5%) of those were electric vehicles. Local brand Tata Motors leads with a 53% market share, followed closely by Mahindra and MG. More critically, the average selling price of local electric vehicles is less than $20,000.

This stands in stark contrast to the price of the Model Y in India. After including a 70% import tariff, the on-the-road price of this model reaches as high as $70,000. To attract Tesla's investment and promote the US-India trade agreement, New Delhi has recently introduced new policies: for overseas car companies that invest over $500 million and achieve local production within three years, import tariffs can be reduced to 15%.

However, local demand in India is still insufficient to support Musk's favored annual production of 500,000 units at a super factory. Moreover, Tesla's Shanghai factory is already capable of covering demand in other Asian markets, and its factories in Europe and the US are currently facing issues of idle capacity.

Nevertheless, there are signs that Tesla may emerge in the Indian market. Although the scale is still small, the Indian electric vehicle market is rapidly expanding. Data from the Federation of Automobile Dealers Associations shows that the electric vehicle market, which barely existed five years ago, has now risen to 4.4% as of June. The affluent class is gradually including electric vehicles in their car purchase lists, alongside traditional fuel vehicles.

Analysts suggest that if new car sales in India reach 5 million by 2030, with electric vehicles accounting for 10%, and if Tesla can capture a 10% market share, annual sales would reach 50,000 units. Although this exceeds the total volume of India's luxury car market in 2023, it is still negligible compared to its global sales of 1.8 million last year. However, as the most populous country continues to develop economically, establishing a foundation in advance may prove crucial