Fans are hailing it a game changer since it opens the EV brand up to the world’s third largest car market by absolute volume just at a time when CEO Elon Musk’s flagging sales badly need a jolt in the arm.
But Tesla isn’t the first carmaker to find allure in the fast-growing economy. Many western brands have suffered trying to carve their own slice of the Indian pie.
“None of the other brands that all had big hopes when entering the market have had any success,” PwC Autofacts analyst Steven von Arsdale tells Fortune.
When it comes to EVs specifically, demand—while growing—remains vestigial. Just 3% of the 1.97 million cars sold in India during the first half of this year were fully electric, according to figures van Arsdale provided for this report.
That makes just 60,000 cars in total, but the segment did expand at a rate of 23% year-on-year. “That isn’t a lot, but it is more than in Japan for example,” he adds. Just 17,700 EVs were sold in Japan over the same period, a share of just 1.3% of the Japanese car market.
“Even a small piece of the world’s third largest market is certainly more attractive than [a large piece] in a wealthier place like Hong Kong or Singapore,” van Arsdale says.
Concentrations of hazardous fine particulates are on average over 50 micrograms per cubic meter, more than 10 times the recommended guideline by the World Health Organization. Twelve of the top 20 worst cities globally are all located in India, with New Delhi topping the list for the sixth straight year.
This week Tesla began taking orders for delivery in two metropolitan areas: Mumbai in the south and Delhi in the North. It is now offering the entry single-motor Model Y in two versions: standard range with 500 kilometers and long range with 622 km. Yet they come with a hefty price tag, starting at 61 lakh rupees when taxes and fees are included.
That works out to be approximately $71,000 for a vehicle that costs roughly half that in the United States. Duties of 70% slapped onto the hood of cars imported into the country account for the sizeable premium. A price like that firmly positions Tesla in the luxury end of India’s car market—the MG Windsor for example can start as low as 10 lakh rupees if you rent the battery by the mile.
“Indian consumers know the Model Y is a car sold around the world that a German or American driver would also buy,” he adds.
