A high-ranking delegation from Tesla recently met with Union Commerce Ministry officials in New Delhi, discussing potential opportunities in India’s growing electric vehicle (EV) market, a recent report indicates.

What Happened? Per a Business Standard report, Tesla’s efforts to penetrate the Indian market have been ongoing for over two years. The company had initially attempted to negotiate reduced import duties to introduce completely built units (CBU) cars for testing but faced opposition from domestic automakers.

Indian manufacturers argued against such concessions, prompting the government to advise Tesla to assemble cars in India (a method known as completely knocked down or CKD operations). These operations make vehicles significantly more affordable due to a lower duty of 10%, compared to 70% on the cost of imported cars exceeding $40,000 (₹33 lakh).

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Why India? Tesla is reportedly renewing its interest in India, driven by its ambitious plan to ramp up production to 20 million electric cars annually by 2030, a huge leap from the 1.3 million units it sold in 2022. To achieve this, Tesla will need to establish numerous gigafactories worldwide. The company also aims to diversify its dependency on China for production and sales.

In a recent interview, Tesla CEO Elon Musk confirmed that the company is “definitely” interested in establishing a presence in India. Additionally, Tesla is planning a more affordable EV, targeting markets in Asia and Latin America.

Despite a relatively small luxury car market and lower EV sales in India, market analysts believe the landscape could change dramatically in the next few years, creating a significant opportunity for Tesla.

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