Our Bureau
New Delhi
Tesla Inc. has begun refunding early reservation holders of its Model 3 in India, hinting at an official entry by the American electric vehicle (EV) giant into the world’s third-largest automobile market.
In emails sent to customers who booked the Model 3 in 2016, Tesla said, “We would like to return your reservation fee for the time being. When we finalise our offerings in India, we will reach the market again. We hope to see you back with us once we are ready to launch and deliver in your country.” The communication, seen by Bloomberg, comes as Tesla phases out the older generation of the Model 3.
The movement is being seen as building a strong market presence by the Elon Musk-led company in the near future after years of being stuck in higher import duties.
Earlier this month, Musk revealed on X that he may visit India later this year, coinciding with ongoing negotiations for a trade deal between India and the United States. The timing of his visit is significant given the possibility of lower tariffs on imported vehicles as part of the Indo-US trade deal. The deal will definitely lead to a more favourable tariff regime for the US-based company that could significantly alter Tesla’s strategy for the Indian market.
Tesla’s Chief Financial Officer Vaibhav Taneja said that the company has been actively working on entering India, but described it as “a very hard market.” “…especially under the current tariff structure in India, any car we send in is subject to a 70% import duty, plus a 30% luxury tax. So, the same car becomes 100% more expensive than what we sell it for elsewhere,” Taneja had said during the Q1 earnings call.
Globally, Tesla’s vehicle deliveries declined last year for the first time in over a decade, as competition from Chinese automaker BYD Co. intensified.
