Elon Musk’s Tesla has officially ventured into India, inaugurating its first showroom in Mumbai amid ongoing challenges in global markets and import duty concerns.
In a significant move for Tesla, the electric vehicle (EV) giant opened its inaugural showroom in India, providing the country with a tangible presence in the form of a new store in Mumbai’s Bandra Kurla Complex—the city’s prime commercial district. The opening event took place on Tuesday, amid increasing anticipation.
This showroom represents a culmination of Tesla’s efforts since 2016 when CEO Elon Musk announced pre-bookings for the Model 3 in countries beyond North America, including India. The new Mumbai location is complemented by a service center and warehouse, situated approximately six kilometers from the showroom, emphasizing Tesla’s commitment to establishing a firm foothold in India’s burgeoning EV market.
Recent months have seen Tesla import over $1 million worth of vehicles, chargers, and accessories from China and the United States, according to a Reuters report. The shipments reportedly included six Model Y vehicles, which are expected to be featured in the Mumbai showroom.
Staffing at the new Mumbai showroom involves over three dozen hired personnel, fulfilling roles such as store managers, sales, and service executives. The company has also advertised positions for supply chain engineers and vehicle operators, who will be responsible for data collection particularly relevant to Tesla’s autopilot features.
Tuesday’s inauguration comes at a crucial time for Tesla, marking its entry into the world’s third-largest car market while the company navigates declining sales in key global markets like China and faces issues related to surplus manufacturing capacity.
Despite the excitement surrounding Tesla’s entry into India, the company faces significant financial hurdles. The nation’s stringent import duties mean Tesla will have to pay around 70% import duty and other levies on the vehicles it brings into the country. Musk has previously voiced concerns over India’s high import tariffs, which could pose challenges to Tesla’s price competitiveness in the market.
Clearance from the authorities for the showroom has been achieved, with a senior regional official from the Regional Transport Office confirming that a trade certificate has been issued to Tesla India after a thorough inspection of its facilities, including the showroom, vehicle parking area, and warehouse.
Amid the anticipation and readiness to operate, a newly created Tesla India social media handle shared a message on X (formerly Twitter), stating, “Coming soon.”
The journey from announcement to the first showroom has been a process filled with ups and downs, particularly given Tesla’s initial announcement in 2016 that allowed Indian customers to place a refundable deposit for a Model 3 vehicle. Fast-forward to this year, Tesla refunded those reservation fees as the Model 3 has been discontinued. The company communicated to early bookers its plans to finalize offerings for India at a later stage.
The timing of Tesla’s entry into India aligns with strategic moves to reinvigorate company sales amid rising competition from Chinese EV competitors like BYD, which has been advancing in auto technology and pricing leadership. As a result, Tesla must navigate both competitive markets abroad and new markets at home.
While there have been governmental efforts to encourage local manufacturing through reduced duty incentives in exchange for significant investments, Tesla has shown little interest in such moves, preferring to focus on retail expansion for now. Union Heavy Industries Minister H D Kumaraswamy mentioned that while other global carmakers have shown interest in local manufacturing, Tesla appears more focused on opening its retail stores, with discussions of a second location potentially in Delhi.
As Tesla continues its foray into India, the company’s ability to navigate these complexities while leveraging its brand and technological prowess will be critical to its success, as it seeks to secure a place in one of the world’s fastest-growing auto markets.
According to Indian Express
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