Tesla's Return to India: A Fresh Look at Showroom Locations

Elon Musk-led Tesla has reportedly restarted its search for showroom locations in New Delhi, signaling a possible revisit to its Indian market entry strategy after earlier suspending investment plans this year. According to two sources who spoke to Reuters, Tesla has initiated preliminary discussions with DLF regarding space in the capital region.

One source revealed that Tesla is looking for 3,000 to 5,000 square feet for a customer experience centre, along with additional space three times that size for service and delivery operations. The company is considering various locations, including DLF's Avenue Mall in southern Delhi and the Cyber Hub complex in Gurugram.

Policy and Market Dynamics: Tesla's Strategic Considerations

Earlier this year, Elon Musk had indicated plans to meet Prime Minister Narendra Modi and potentially announce a $2-3 billion investment in India. However, the meeting was cancelled when Tesla announced staff reductions amidst declining sales. The outcome of Tesla's discussions with India's largest property developer remains uncertain, with the company maintaining parallel discussions with other entities.

Questions also remain regarding Tesla's approach to vehicle imports, whether at the 100% tax rate or under India's new policy allowing certain EVs at 15% import duty. Following Tesla's previous unrealised investment plans, the Indian government is considering policy adjustments to attract manufacturers like Hyundai Motor and Toyota, who have shown preliminary interest.

India's EV Market: A Promising Future

While India's EV market currently represents approximately 2% of total car sales of 4 million annually, the government aims to increase this to 30% by 2030. Tesla's showroom search coincides with Musk's Starlink considering Indian market entry, indicating a broader strategic interest in the country.