Tesla is recalibrating its approach in the Indian market after selling only about 100 electric vehicles since its high-profile entry in July, as the company faces significant headwinds from high prices and limited charging infrastructure. In response, it has opened its largest service hub and is focusing on enhancing the EV ecosystem to revive demand.
Tesla recently inaugurated its most extensive sales and service center in Gurugram, combining showroom, charging, and after-sales facilities under one roof. This move comes amid disappointing sales figures, with dealership data revealing just over 100 units sold since deliveries began in September. The company’s debut in India was met with much fanfare, but conversions from bookings have been minimal, highlighting the challenges in this price-sensitive market. Only a small portion of the over 600 bookings made by mid-September have turned into actual sales, underscoring the gap between initial interest and purchase decisions.
The sluggish performance is stark when compared to competitors like BMW, BYD, and Mercedes Benz, which have reported robust sales buoyed by festive demand and tax incentives. Electric vehicles account for less than 3% of passenger vehicle sales in India, and the slow development of charging infrastructure—with only around 25,000 stations nationwide—poses a major barrier. High import duties and the steep upfront cost of Tesla models, such as the Model Y priced around $70,000, further deter potential buyers in a market where affordability is key.
To counter these issues, Tesla is implementing a three-pronged strategy aimed at increasing adoption, expanding its charging network, and improving customer experience. The company plans to install more superchargers, which can add about 170 miles of range in 15 minutes, and promote home charging options that offer convenience and cost savings. India head Sharad Agarwal emphasized that owners can recoup up to two million rupees over four years on fuel and maintenance, addressing concerns about long-term expenses.
At the Gurugram hub launch, Agarwal detailed how remote software updates reduce ownership costs, and home charging is roughly one-tenth the price of petrol. However, experts like Hormazd Sorabjee of Autocar India suggest that Tesla’s low sales might be strategic, allowing the company to establish a foothold before scaling up. They believe there is potential for growth as the EV market matures, but immediate results are hampered by infrastructural and economic constraints.
Tesla’s struggles in India are part of a broader trend, with demand slowing in key markets like Europe, China, and the US. In October, the company reported a 37% drop in profits despite record revenue, attributed to tariffs and research and development costs. This global context underscores the importance of diversifying into emerging markets like India, where long-term opportunities exist despite current hurdles, including Musk’s reluctance to pursue local manufacturing despite government incentives.
Looking ahead, Tesla’s success in India will depend on overcoming infrastructure gaps, aligning with government policies, and making its vehicles more accessible. As the country gradually embraces electric mobility, Tesla’s initiatives could pave the way for broader adoption, but immediate sales growth remains uncertain amid economic and logistical challenges. The company’s focus on ecosystem development may eventually pay off, but it requires patience and adaptation to local market dynamics.
