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Shillong, July 14: Tesla’s plan to introduce a cheaper Model 3 in India at around Rs 20 lakh (approximately $27,000) and establish its supply chain ecosystem in the country appears to be a challenging goal, according to industry experts.
While Tesla aims to produce 500,000 electric vehicles annually in India at the targeted price point, experts believe achieving this range is currently unrealistic. The base variant of the Tesla Model 3, the cheapest Tesla model available, is priced at $40,240 (approximately Rs 33 lakh). Importing this model into India would incur a cost ranging between Rs 60-66 lakh due to the country’s 100% import tax on EVs priced above $40,000.
IANS reported that to reduce costs, Tesla would need to set up local production in India. However, even with local production, acquiring a $40,240 car for $24,366 (Rs 20 lakh) still appears to be a distant dream, according to Senior Analyst Soumen Mandal from Counterpoint Research. Cost reduction could be achieved by offering Tesla models in India with fewer features compared to the US models, such as eliminating certain hardware required for Full Self-Driving (FSD) and utilizing a lower-capacity battery pack and lower-power electric motors.
While Tesla is in talks with the Indian government and industry executives, it may take time before a Tesla facility is established in the country. Additionally, Tesla is reportedly working on a ‘next-gen’ EV platform that would support compact cars and potentially enable the company to enter the sub-$25,000 EV segment. Industry experts anticipate that India could become a manufacturing hub for these compact models, with prices starting from Rs 20 lakh.
However, the realization of a Tesla priced around Rs 20 lakh in India depends on various factors, including attractive policy incentives and Tesla’s ability to achieve supply chain efficiencies and cost reductions through local manufacturing. Existing EV players in India, like Tata Motors and MG, cater to the budget segment, while Tesla’s pricing positions it in the premium segment.