Global brokerage firm CLSA has released a report on the possibilities of Tesla's entry into India, challenges and the Indian auto sector, especially the electric vehicle (EV) segment. According to the report, the arrival of Tesla is expected to boost the premium segment of the Indian car market. While the average selling price of cars in India is around $14,000, Tesla's most affordable model in the US starts at $35,000.

Globally, EV penetration is around 30% in China, 9.5% in the US and only 2.4% in India. Tesla projects 1.8 million units sold worldwide in 2024, with China (40%) and the US (35%) being the major markets.

Import duty and manufacturing challenges
The report also mentions import duty and manufacturing challenges. India levies 110% import duty on cars priced above $40,000 and 60% on cars priced below that. Tesla will need to set up a local manufacturing unit to establish a competitive price. Under India's EV policy, Tesla will have to invest ₹4,150 crore ($500M) to avail import duty benefits. Even with low import duties (20%), Tesla's on-road prices will remain above ₹35-40 lakh ($40,000+). Comparison with China and EV adoption in India The report compares markets like China where EV penetration is high due to affordable prices, strong infrastructure and government subsidies. Tesla has a share of around 15% in the global EV market. It has a share of 40% in the US and 10% in China. In India, EV penetration is projected to reach 15% by CY28 and 25% by CY2030.