In an effort to expand into new areas and counteract declining sales in its established regions, Elon Musk's electric vehicle manufacturer, Tesla Inc., is launching its first showroom in India.

The Bandra Kurla Complex, a 4,000-square-foot facility in Mumbai's upscale financial area, will open for business today.

Reports indicate that it may feature Chinese-made Model Y crossovers that are anticipated to retail for nearly $56,000 before taxes and insurance.

Without a federal tax credit, that would be roughly $10,000 more than the car's starting price in the US.

By the end of July, a second showroom is anticipated to open in New Delhi, and Tesla has increased local recruiting and acquired warehouse space.

However, Tesla's foray into India is more about assessing demand for its EVs and enhancing the brand's reputation than it is about making quick sales volume gains. The company has no intentions to establish a production facility in the third-largest auto market in the world.

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"It's not meaningful from a volume standpoint yet," says Jay Kale, a Mumbai-based analyst at Elara Securities. "But it plants the brand. Over time, as charging infrastructure improves and the lineup expands, Tesla could scale."

The long-awaited action is taken as Tesla encounters difficulties in its two main markets, China and the US. Following a poor 2024, the corporation is keen to prevent a second year of decreases after its revenues dropped last quarter.

Due in part to a variety of protectionist obstacles, the American EV manufacturer has been losing market share to Chinese competitor BYD Co. on a global scale.

India offers a chance to expand in a mostly unexplored market.

 

Even though the Model Y is observed to be the best-selling electric vehicle worldwide, not many Indians are said to be able to acquire one. Luxury automobiles account for only one percent of all vehicle sales, and the country's EV penetration rate is still around five percent.

Instead of mass-market low-cost automakers like Tata Motors Ltd., Mahindra & Mahindra Ltd., and MG Motor India Pvt., Tesla will mostly compete with German luxury automakers like BMW and Mercedes-Benz Group AG.

Musk's business has dabbled in the idea of setting up a local manufacturing base, which the Indian government has encouraged and which may avoid high import taxes. However, Tesla hasn't made a commitment to this as of yet.

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India and the US are presently discussing a trade agreement that might lower auto tariffs, something Musk has been requesting for years. It's unclear if the Tesla CEO's recently tense relationship with US President Donald Trump would affect the company's lobbying efforts to reduce trade barriers in India.

Following the resignation of its previous head of operations in India in May, the Tesla brand made its debut in that country. However, it is anticipated that the Mumbai showroom opening will replicate Tesla's strategy from its early years in China, when a marketing frenzy preceded a manufacturing investment and a sales frenzy.