With the increasing anticipation surrounding Tesla’s potential entry into the Indian market, analysts are emphasizing the need for competitive pricing of its models. To secure a significant presence on Indian roads, Tesla may need to price its vehicles below $30,000 (approximately ₹26 lakh). Otherwise, the company’s market penetration could remain limited. The speculation over Tesla’s entry into India intensified recently after the company advertised retail positions in Mumbai. However, a report from BNP Paribas suggests that Tesla’s foray into India might be “slow and measured,” due to the country’s lower average car price point.
Even if Tesla manages to offer a vehicle at the $30,000 mark, it would still be considered costly for mass adoption in India, particularly when factoring in the 15 percent custom duties. The analysts believe that local production would only be viable if Tesla could reduce its prices to below $30,000, thereby tapping into mass volumes.
Tesla had previously abandoned its true low-cost Model 2 plans over a year ago, shifting its focus to Robotaxi and robotics initiatives. The company’s plans for an “unboxed” assembly process and a plant in Mexico were also shelved, which implies these strategies are unlikely to be resurrected for the Indian market.
The analysts predict that Tesla will address India by exporting cars from one of its existing plants, resulting in limited volumes for the foreseeable future. Among original equipment manufacturers (OEMs), Mahindra & Mahindra (M&M) is perceived to be most at risk from Tesla’s entry into this segment.
Despite concerns, BNP Paribas analysts believe there is no significant threat to M&M from Tesla’s existing models or a potential new $25,000 model. They noted that M&M’s stock did experience a temporary dip of around 9 percent last year due to fears of Tesla’s entry but quickly rebounded.
In India, the average car price is approximately ₹11 lakh ($13,000). The report estimates that about 25 percent of industry volume comprises models priced above $23,000, which could be most vulnerable if Tesla introduces a product below $30,000. The Indian automotive market presents an annual volume opportunity of around 1 million units at prices above $23,000.