Tesla Cheapest Car in India to Cost Around Rs 35-40 Lakh
Elon Musk-led Tesla is gearing up to enter the Indian market, but even after the government reduces import duties to below 20%, the price of Tesla’s cheapest model is expected to remain high. According to a report by global capital market company CLSA, the Tesla Model 3—the most affordable Tesla model—will cost between Rs 35 to 40 lakh in India.
Why Will Tesla’s Cars Be Expensive in India?
The report states that the Tesla Model 3 costs around $35,000 (approximately Rs 30.4 lakh) at the factory level in the US. With expected import duties between 15-20%, and additional expenses such as road tax and insurance, the on-road price in India would be around $40,000 (Rs 35-40 lakh).
“The cheapest Model 3 for Tesla in the US is c.USD35k. With tariff lowered to c.15-20% in India, along with road tax, insurance, and other costs, the on-road price would be c.USD40k, which is close to Rs 3.5-4m.” – CLSA Report
Can Tesla Disrupt the Indian EV Market?
Many analysts believe Tesla’s entry will not significantly disrupt India’s Electric Vehicle (EV) market unless the company introduces a more affordable model. Currently, domestic EV models such as:
- Mahindra XUV 9e
- Hyundai e-Creta
- Maruti Suzuki e-Vitara
are likely to remain more competitive in pricing.
Even if Tesla launches a new entry-level model priced below Rs 25 lakh, experts suggest that Indian automakers may already have factored in this competition.
Tesla Hiring Process & Expansion Plans
Tesla has officially begun its hiring process in India, a major step towards its much-anticipated market debut. On February 18, 2025, Tesla posted a job listing on LinkedIn for the position of Consumer Engagement Manager in Mumbai. The company is also expected to launch its first models in Delhi and Mumbai in the coming months.
Does Tesla Need a Local Manufacturing Plant in India?
A major concern for Tesla is its cost structure in India. To make its cars more affordable and scale up operations, setting up a local manufacturing facility is necessary.
Key Points from the Report:
- Under India’s EV policy, Tesla can benefit from a 15% import duty on up to 8,000 units per year if it invests over Rs 4,150 crore in setting up a local factory.
- If Tesla fails to establish local production, its cars will remain out of reach for most Indian buyers.
Indian Consumers Price Sensitivity – A Challenge for Tesla?
The report also draws a comparison between the motorcycle market in India, citing the example of Harley-Davidson X440 vs. Royal Enfield Classic 350:
- The Harley-Davidson X440, priced 20% higher than Royal Enfield Classic 350, sells only 1,500 units per month.
- Meanwhile, Royal Enfield Classic 350 sells about 28,000 units monthly.
- This suggests that Indian consumers are highly price-sensitive, making it difficult for Tesla to gain market traction without competitive pricing.
