Many people are curious about how affordable Tesla cars will be as the company prepares to enter the Indian market. Reports suggest that the cost of Tesla's most affordable model (which is the Model 3) will still be between Rs 35-40 lakh even with reduced import duties under 20%. This includes extra costs like road tax, insurance and local fees.

Tesla is eager to make a mark in India's rapidly growing electric vehicle (EV) market. However, the Model 3 that costs around Rs 30.4 lakh in the US will be considerably pricier in India. The big question is that can Tesla adjust its pricing strategy to appeal to India's budget conscious consumers?

It remains to be seen whether its final price will be competitive enough to challenge other brands in India’s evolving EV space as Tesla prepares to launch in Delhi and Mumbai.

Will Tesla Compete with Indian EV Brands on Price?

Local EV manufacturers like Mahindra and Hyundai offer models like the XUV400 and e-Creta at much lower prices which could pose a challenge for Tesla. India's EV market is still developing and price is a key factor for most buyers. Tesla's higher prices which are potentially 20-50% more than domestic EVs might limit its appeal unless it adjusts pricing.

If Tesla can introduce a more affordable model priced below Rs 25 lakh then it could gain some traction. However, it will face stiff competition from well established and cost effective options. Even so, experts believe Tesla's entry won't drastically impact local automakers like Mahindra and Maruti Suzuki as EVs still make up a small portion of India's car market.

Tesla's Success in India: Can Local Manufacturing Solve the Price Issue?

Establishing a local manufacturing facility might be key for Tesla to succeed in India. Tesla could benefit from lower import duties from around 15% on up to 8,000 units annually with a plant in India whcih can help to make their cars more affordable. Local production would also enable Tesla to scale its operations and better meet local demand.

Setting up a manufacturing facility would require a significant investment of around Rs 4,150 crore. Tesla’s high prices may continue to keep its cars out of reach for many Indian consumers without local production. Competitive pricing through local manufacturing will determine its long-term success in India while Tesla’s brand could spark interest.