CHENNAI: Tesla, the US-based electric vehicle manufacturer, expects Indian buyers of its Model Y to recover roughly one-third of the vehicle’s 6 million rupee (approximately $67,220) purchase cost through savings on fuel and maintenance within a period of 4 to 5 years, according to India General Manager Sharad Agarwal, who spoke to media on Wednesday.
The company made its entry into the Indian market in July, pricing the Model Y nearly 70 percent above its US retail cost, a difference largely attributed to India’s steep import duties and taxation on electric vehicles, Reuters reported.
The high price of Model Y in India has largely been the result of import tariffs and related costs. When first introduced in India, the car was imported and priced significantly higher than what buyers pay in markets such as the US, China or Europe. This price structure has limited Tesla’s buyer base to a narrow, affluent niche — an approach that is unlikely to yield strong sales volumes in India, where price sensitivity remains a dominant factor among vehicle buyers.
If buyers can recoup a significant portion of the cost, as Tesla estimates, the implications could be meaningful both for the company and for EV adoption in India. More Indian buyers might then seriously consider an EV over a conventional internal-combustion car, especially if the cost savings over time — from lower fuel and maintenance expenses, and possibly higher resale value — are significant. For Tesla, a less expensive Model Y could translate into higher sales volume, better market penetration, and a stronger foothold in what remains a nascent EV market in India.