Tesla may launch an affordable EV in India: Can this car rival the Tata Tiago EV?


  • Tesla CEO Elon Musk didn’t offer more details on the company’s plans
  • However, negotiations between the Indian Government and Tesla have stalled
  • Meanwhile, the Tata Tiago EV continues to be popular in India due to its low-cost appeal

The Indian electric vehicle market is growing significantly with the inclusion of newer two-wheeler and four-wheelers. Amidst the growing number of electric cars, Tata’s announcement of the Tiago EV has taken the market by storm, especially for its affordable price tag. Keeping this in mind, it seems like Tesla may also look to cash in on the demand for cheaper EVs, at least based on company CEO Elon Musk’s words.

“We do think that making a much more affordable vehicle would make a lot of sense and we should do something,” Musk said while speaking virtually at the G20 Summit in Bali, Indonesia. This doesn’t confirm a new low-cost Tesla for markets like India and Indonesia. However, it does signal an interest in automotive giants like Tesla to tap into the low-cost EV segment.

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If an affordable Tesla EV does make its way to India, it could certainly have some impact on other EV makers in the country, including Tata Motors. With the likes of the Nexon EV currently dominating the market and the Tiago EV generating more buzz than initially expected, it may not be easy for any low-cost EV to replicate Tata Motors’ success. Price will obviously play a big role when (and if) Tesla rolls out a cheaper EV. However, it may be easier said than done given the myriad roadblocks facing the American automaker.

Talks between the Indian Government and Tesla on hold

Negotiations between Tesla and the Indian Government appear to have reached an impasse over the former’s request for a tax rebate on its EVs. As The Telegraph points out, the Chairman of the Central Board of Indirect Taxes and Customs, Vivek Johri, has previously mentioned that since other auto manufacturers in India are currently operating within the current tariff system, the agency is unlikely to make any exceptions for Tesla.

The only way for talks to progress further is for either party to give in to the other’s demands. For Tesla, it would involve assembling its electric cars locally rather than bringing them via the CKD (completely knocked down) route. Import duties are also a big sticking point for the automaker, as India levies 100% duty on imported cars on cars that have a CIF (Cost, Insurance, and Freight) value of over $40,000 and 60% duty on cars that have a CIF value below $40,000.

Source: The Telegraph India