Tesla is weighing its options for entering the Indian market, as reported by CNBC on Wednesday.
During Tesla’s recent earnings call, Chief Financial Officer Vaibhav Taneja described India as an attractive market with a large middle class but also a very challenging one, signaling a cautious approach to expansion.
The main hurdle for Tesla’s entry into India is the country’s steep import duties. Electric vehicles face a 70% import tax and an additional 30% luxury tax, potentially doubling the price of Tesla vehicles. Taneja acknowledged these challenges, stating that these factors create tension and that the company considers the optimal timing for its entry.
Taneja’s comments follow a significant meeting between Tesla CEO Elon Musk and Indian Prime Minister Narendra Modi. The two leaders met in Washington D.C., this February to discuss potential collaboration in technology and innovation. At the time, Tesla explored the possibility of exporting electric vehicles from its Berlin factory to India.
The Indian government has shown a willingness to negotiate, offering to reduce the import tariff from 70% to 15% if Tesla commits to some level of local production. Tesla is likely to push for more comprehensive policy changes. Additional tariffs imposed by President Donald Trump’s administration on various trade partners, including India, could complicate negotiations between Tesla and the Indian government.
Tesla’s recent financial report revealed a challenging first quarter, with automotive sales dropping by 20% and net income falling by 71%.
