Tesla's India Struggles

Tesla has opened its largest sales and service hub in India at a time when the company faces sluggish demand in Asia’s third-largest economy. The new centre, located in the northern business hub of Gurugram, brings together a showroom, charging facilities and after-sales services in an attempt to strengthen the company’s local footprint. Despite this significant investment, Tesla’s sales performance in India has been unexpectedly weak, raising questions about the company’s long term strategy in a market seen as crucial for future global expansion.

Since its highly publicised debut in July, Tesla has sold just over one hundred cars in the country, according to dealership data. This is a modest figure for a company that dominates electric vehicle markets in Europe, China and the United States. Sources familiar with Tesla’s operations told the BBC that the company is now seeking to rebuild sales momentum by supporting the broader electric vehicle ecosystem in India rather than focusing solely on unit sales.

Tesla did not respond directly to queries regarding the disappointing figures. However, industry observers note that the company has struggled to gain a foothold from the very beginning. Early reports indicate that Tesla received just over six hundred bookings by mid September. Only a small share of these bookings converted into actual sales once deliveries began, even though rival brands such as BMW, BYD and Mercedes Benz posted strong numbers during the country’s festive shopping period. These competitors benefited from both seasonal demand and recent tax reductions that boosted premium vehicle purchases.

According to individuals close to the company, Tesla’s plan to improve its position in India rests on a three part strategy. The first priority is to increase adoption of electric vehicles through consumer outreach and awareness building. The second involves a rapid expansion of charging infrastructure across urban and semi urban regions. The third seeks to improve customer experience through easier access to after sales support and remote diagnostics. Industry experts argue that these measures are necessary if Tesla hopes to compete effectively in the country.

High import taxes remain one of the most significant barriers to Tesla’s growth. India imposes steep duties on fully assembled foreign cars, which sharply increases their retail prices. The slow pace of electric vehicle adoption in the country presents an additional hurdle. Although the market is growing, battery powered cars account for less than three per cent of all passenger vehicle sales. Charging infrastructure is also still limited. India currently has only around twenty five thousand charging stations, a figure far below what analysts believe is required to support mass adoption.

Tesla’s executives argue that the higher upfront cost of their cars is offset by long term savings. At the launch of the Gurugram centre, Tesla’s India head Sharad Agarwal claimed that buyers could recover up to two million rupees in fuel and maintenance savings over four years. This amount is roughly a third of the cost of the Model Y sold in India. Mr Agarwal said that most maintenance services are conducted remotely through software updates, which keeps ownership costs low. He also highlighted that the cost of home charging is roughly one tenth of petrol prices.

Industry analysts remain cautiously optimistic. Hormazd Sorabjee, editor of Autocar India, said that Tesla’s current sales numbers are low by any standard, but he believes the company is still in the initial stage of establishing itself in the Indian market. He described the company’s presence as a foot in the door, suggesting that long term potential remains strong if Tesla continues to adapt.

Tesla’s cars can be charged at home, providing up to seventy kilometres of driving range for every hour of charging. The company is working to extend its national charging network and to install more superchargers. These fast chargers can deliver more than one hundred and seventy miles of driving range in roughly fifteen minutes, which could help alleviate consumer concerns about charging times.

Tesla’s struggle in India mirrors a broader slowdown in some of its key markets. Demand in Europe, China and the United States has softened in recent months. The company reported a twelve per cent rise in quarterly revenue in October, reaching a record twenty eight billion dollars. However, profits fell by thirty seven per cent due to higher research and development costs and expenses linked to tariffs.

In India, Elon Musk has shown limited enthusiasm for manufacturing locally, preferring to import vehicles despite incentives introduced in March last year to attract global electric vehicle producers. Industry observers believe that a shift towards local production could reduce prices and improve Tesla’s competitiveness, but it remains unclear whether the company intends to pursue this path.