US carmaker Tesla’s debut in the Indian market has been underwhelming. The Elon Musk-led car company has reportedly received orders for only 600 electric cars since it commenced sales on July 15.
News agency Bloomberg reported that the number is much lower than Tesla’s expectations as it was aiming to utilise its full quota of 2,500 cars this year. The carmaker now plans to ship 350-500 cars to India this year.
The first batch is expected to arrive from its Chinese factory in Shanghai in early September. Tesla is expected to make initial deliveries in major metropolitan cities such as Mumbai, Delhi, Pune, and Gurugram.
After a long delay, Tesla entered the Indian market in July by launching its most popular model, Model Y (RWD), at a starting price of Rs 60 lakh, which goes up to Rs 68 lakh for the long-range variant. The company’s first store opened in Mumbai, followed by a Delhi launch.
The low demand for the Tesla model can be attributed to its steep price in India when compared to other markets. For example, Model Y prices start at Rs 38.6 lakh ($44,990) in the US, Rs 30.5 lakh in China (263,500 yuan), and Rs 46 lakh in Germany (€45,970). The higher prices in India are attributed to import duties and logistics costs. India imposes a 70% tariff on imported cars priced below $40,000.
The road ahead for Tesla in India may face a severe headwind as an Indian tax panel has proposed steep increases in GST on luxury electric cars priced above $46,000, as per a government document seen by Reuters. At present, India taxes all electric cars at 5%. The panel recommended raising the GST rate to 18% from 5% currently for EVs priced between $23,000-$46,000 and to 28% for electric cars priced above $46,000.
As per the report, Tesla is mulling strengthening its EV charging infrastructure in India by setting up supercharging stations across key Delhi NCR hubs, starting with Gurugram, in the coming weeks. The company has already opened its first charging station in India in Mumbai and to support repairs and customer service, it has leased a 33,000 sq ft retail and service space on Sohna Road, Gurugram.