Tesla Spotted on Indian Roads: What does it mean for EV companies in India?

Tesla cars have recently been seen on Indian roads, which created a spark of curiosity among car lovers. This is a strong sign that Tesla can eventually enter the Indian market after many years of speculation.

With its smooth design and advanced features, Tesla's arrival can change how we see the electric vehicle (EV) industry in India. It also raises important questions for Indian EV producers on competition, prices, and innovation. In this article, we find out what Tesla’s presence means for India’s EV future.

Tesla's Entry Strategy in India

Tesla is strategically entering the Indian EV market by initially introducing its Model Y and Model 3 through imports from its Berlin factory, leveraging a recent policy that reduces import duties from 110 per cent to 15 per cent for companies committing to local manufacturing within three years and investing $500 million.

The Model Y, a compact SUV, is expected to be priced around Rs 27 lakh, targeting the premium segment. The Model Y comes in three versions: Long Range with Rear-Wheel Drive, Long Range with All-Wheel Drive, and Performance with All-Wheel Drive.

The prices listed are simply the US prices converted into Indian rupees.

Tesla plans to employ its direct-to-consumer sales model, bypassing traditional dealerships, and has secured showroom locations in Mumbai and New Delhi.

Additionally, Tesla is exploring the establishment of a local manufacturing facility with an annual capacity of 5,00,000 vehicles, requiring an investment of $2–3 billion, which would enable the production of more affordable models tailored to the Indian market.​

Impact on Indian EV Companies

As Tesla gears up for its debut on Indian roads, the ripple effects are already being felt across the domestic EV landscape. Let’s look at how this could affect Indian electric car companies:

1. Market Impact on EV Companies

Tesla coming to India is a big deal for the electric vehicle market. Indian companies like Tata Motors and Mahindra & Mahindra have done well so far, but Tesla's arrival brings strong global competition.

This development has already impacted the stock market and EV stocks. For instance, Mahindra & Mahindra's shares declined by approximately 5 per cent in the week following Tesla's announcement, and Tata Motors' stock reached a 52-week low. However, it is believed that this reaction may be temporary, as Tesla's premium pricing positions it in a different market segment.

To monitor the EV trend, the National Stock Exchange (NSE) introduced the Nifty EV & New Age Automotive index in May 2024. This index tracks companies engaged in electric vehicles, batteries, and related technologies.

As of May 2, 2025, the index stands at 2,716.95 points, reflecting a 6.75 per cent increase over the past quarter. This growth indicates investor optimism in the EV sector, influenced by Tesla's presence and India's push for sustainable transportation.

2. Impact on Consumer Preferences

Tesla is entering the Indian EV market, and it could change what people expect from EVs. Tesla is known for smart features like self-driving, software updates through the internet, and long-lasting batteries. Now, Indian buyers might want similar features in EVs made in India too.

Indian consumers may start preferring EVs that offer not just affordability but also advanced features and superior performance. As a result, Indian EV makers may need to improve faster to keep up with what customers want.

3. Improvement in Indian EVs

Tesla plans to launch the Model Y in India in 2025. This model has a driving range of 526 km on a charge. Tata’s updated Nexon EV now delivers up to 489 km MIDC-certified range, while Mahindra’s XEV 9e offers between 425–570.5Km ARAI-rated range, depending on the variant. Both models incorporate advanced features like over-the-air updates and driver-assistance systems, aligning with Tesla’s technological standards.

While Tesla's entry raises the bar, it also encourages local manufacturers to innovate and stay competitive in the evolving EV market.

Conclusion

Tesla cars being seen on Indian roads show that big changes are coming for electric vehicles in India. This can help people get more choices and encourage companies to improve their products. Though there are still challenges like high prices and charging stations, Tesla’s entry could make the future of cars in India cleaner and better.

(This article is part of IndiaDotCom Pvt Ltd’s Consumer Connect Initiative, a paid publication programme. IDPL claims no editorial involvement and assumes no responsibility, liability or claims for any errors or omissions in the content of the article.)