Tesla Drives Into India, Hunt For First India Showroom Locations Begins

US electric carmaker Tesla is scouting potential showroom locations in New Delhi and Mumbai, news agency Reuters reported. According to two individuals privy to the development, the company aims to commence sales in India later this year. Facing a recent dip in global vehicle deliveries for the first time in nearly four years, Tesla is intensifying its efforts to penetrate new markets.

It is eyeing showroom spaces ranging from 3,000 to 5,000 square feet (280-465 square meters) in size, along with establishing service hubs in both cities, as revealed by one of the insiders acquainted with Tesla’s plans. Sources have disclosed to Reuters that Tesla has initiated the production of right-hand drive cars at its facility in Germany, with intentions to export them to India.

In a bid to incentivise electric vehicle adoption, India recently slashed import taxes on such vehicles from as high as 100 per cent to a flat 15 per cent rate for automakers investing a minimum of $500 million and establishing manufacturing plants within the country.

Tesla’s CEO Elon Musk is anticipated to unveil investment plans and engage in discussions with Prime Minister Narendra Modi during his upcoming two-day visit to India, starting from Sunday. This visit marks a continuation of their prior meeting in New York in June.

Executives at Tesla have begun surveying potential locations in the past month, engaging in discussions with various real estate developers regarding potential high street and mall sites for showroom placement. It’s emphasised that the company is eager to commence construction promptly to ensure showroom openings by 2024.

While the sources preferred anonymity due to the confidential nature of the discussions, Tesla has not yet responded to requests for comment on the matter.

Tesla’s strategic move into the Indian market comes amidst challenges in its core markets of the United States and China, with slower-than-expected growth for electric vehicles. Additionally, reports from Reuters indicate the cancellation of a long-awaited budget-friendly Tesla model, which investors had anticipated would drive mass-market growth.

Despite these hurdles, the demand for electric vehicles in India, the world’s third-largest auto market, is projected to surge. Although electric vehicles constituted merely 2 per cent of India’s total car sales in 2023, the government has articulated ambitions for 30 per cent of all new car sales to be electric by 2030. As Tesla prepares to embark on its Indian venture, all eyes are on the potential impact of its entry into this dynamic and rapidly evolving automotive landscape.

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