Daybreak - Why Tesla's wheels aren't turning in India (yet)

Episode Date: June 2, 2025

Tesla’s story in India has been more like a stalled engine than a roaring electric debut—despite years of headlines, high-level meetings, and hopeful tweets. While the Indian government did slash import duties on premium EVs from a staggering 110% to a friendlier 15%, it wasn’t enough. Because for Tesla, this isn't just about taxes. It is about suppliers, standards, scale, and most importantly, timing. But India wants Tesla.Prime ministers have courted the company. Officials have tweaked policies. Showrooms are being prepped. And yet, eight years after the Model 3 opened bookings in India, those cool-looking cars are nowhere to be seen on our roads. In fact, buyers have been canceling and Tesla’s India leadership is quitting. What is going on?Tune in.**Correction: The host mistakenly referred to Hyundai Ioniq car model as Iconiq. The error is regretted.P.S The Ken’s podcast team is hiring! Here’s what we’re looking for.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.Listen to the latest episode of Two by Two here

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Tesla's story in India has been more like a stalled engine than a roaring electric debut, despite all the years of headlines, high-level meetings and hopeful tweets. Yes, the Indian government finally did slash import duties on premium EVs from a staggering 110% to a much friendlier 15%.

But that wasn't enough. Because for Tesla, this is not just about taxes. It is about suppliers, standards, scale and most importantly, timing. And here's the thing. India wants Tesla badly. Prime ministers have courted the company. Officials have tweaked policies and showrooms are being prepared. And yet, eight years after the Model 3 open bookings in India, those cool-looking cars are still nowhere on our roads. Buyers are canceling, Tesla's Indian leadership is quitting, and what we are left with is a glimmer of a brand and a showroom that has not opened yet.

So what is really happening here? Why does Tesla move at lightning speed in Shanghai but crawl when it comes to Mumbai? Today, we look at the messy love story between India and Tesla, the deals, the delays and the dilemma. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Da Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rahal Philipos and I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 2nd of June. Let's start with what Tesla wants. It's not just about importing cars.

It is about building a base and ecosystem. Tesla's factories depend on local suppliers who meet very, very high standards. Battery cells, semiconductors, sensors, control units, the works. And India is not quite there yet. According to industry experts, EV manufacturing is not like electronics. The automotive value chain is massive, the third longest after semiconductors and aviation. So even if India's eager, it is going to take years to build what Tesla needs. And that is not the only problem.

Tesla's signature models, premium sedans, are kind of out of sync with India's evolving taste. It's all about crossovers and SUVs over here. Sedans, maybe not so much. And even if Tesla launches its model Y, it will be facing off against heavyweets like Mahindra, Kia, BMW, and even local luxury EVs which are priced way below Tesla's tag. Meanwhile, Elon Musk's habit of making big promises and slow deliveries is not helping either. Back in 2016, Tesla launched Model 3 globally and opened bookings in India. At least 50 wealthy Indians put down deposits.

People like Ptm's Vijayshaker Sharma and GOQI's with Charles Gondell. Eight years later, still no car. Gondell even cancelled his booking and bought a naughty. And Tesla is only now returning those deposits. The company says that it will reconnect with buyers once it finalizes Indian plants. But that might take another three to five years. And until then, the strategy is low risk. A couple of showrooms in big cities.

And the first one is in Mumbai's upscale Bandra Kourla complex right next to India's first Apple store. Over two crore rupees in security deposit and 35 lakh rupees. in monthly rent. But behind all the glitz, Tesla's India team is shrinking. Its head Prashant Menon resigned this May. Others, including top HR and directors, have quit over the last year. No replacement so far. Tesla China, meanwhile, is now overseeing India ops. And those 35 open roles that Tesla is hiring for in India, they are mostly for sales and support, not for engineering or for leadership. So, what is the real plan?

Import some vehicles, source a few from Germany, maybe a few from China, though that is tricky. India and China aren't exactly cozy right now, as we all know. So what does Tesla need in India to finally shift gears? Stay tuned to find out. Hi there, we are taking a quick break from the episode to make a very special announcement. This week marks the 500th episode of data. break. And to celebrate, we invited a very special guest on the show to talk about something we just don't hear enough about. We sat down with Somia Rajin, the founder and CEO of

Waterfield Advisors, India's largest multifamily office, to talk about what wealthy women do with their money, how they make it, how they grow it, and of course, how they spend it. Our target market or client base was women inheritors, women professionals and women entrepreneurs. Each one of them has a slightly different nuanced, a nuanced expectation from heritage. But the common thread for all three was that all these women were already financially independent, but they were not financially literate. But this isn't just a conversation about finance. It's about values, identity, and the quiet but powerful ways women are changing the story of money. Today as a founder, I feel quite lonely in terms of who can I talk to when I have issues around scaling my business, taking on a co-founder, deciding when to raise capital.

You know, the old boys' networks are many, but the networks for women are smaller. You can listen to the full episode right now on Daybreak. It's out on all platforms. The link is in the show notes of this episode. Do check it out and let us know what you think. And if you've been with us across any part of these 500 episodes, thank you. We could not have done it without you. Yes, thank you from me too. And now back to the episode. Let's zoom out a little bit.

The global EV scene is kind of booming. In 2024, EVs made up more than 20% of global car sales. And China is leading with half their car sales being electric. India, meanwhile, is just 2.5%. And Tesla doesn't even make budget EVs. Most EVs sold in India today are under 20 lakh rupees and Tesla is far above that. Even luxury EVs in India are struggling. That segment which starts at about 50 lakh rupees is only 1% of all luxury cars sold in this country.

For example, in April, total luxury EVs sales were just 250 units. Hyundai's iconic 5 meanwhile sold just 16 cars, Mercedes down to 40% month over month. So, where does Tesla fit? Earlier this year, it imported Model YSUs for testing on Indian roads. These came from Germany. And if India's trade deal with the EU goes through, import costs could drop, making German-made Tesla's more affordable in the country. Right now, India's new EV import policy,

allows up to 8,000 vehicles annually at 15% duty. But only if the company invests over $500 million and commits to local sourcing. That is Tesla's chance, but it is a narrow window. Even if it chooses to manufacture locally, it will not be easy. Because unlike Apple, Tesla's needs are very complex. Auto supplies in India aren't yet up to Tesla's standards. Many would need to upgrade technology, absorb massive capex and meet tight tolerances. Still, Tesla is sniffing around.

It is reportedly talking to the Tata's, especially Tata AutoCom, which already makes battery packs with Chinese partner Goshen. In fact, Goshen is said to have had a deal with Tesla to produce 200 gigawatts of battery cells by 2028. That is enough for half a million cars. annually. Tesla could also lean on other Apple suppliers in India, companies like CG power and micron, to build out its supply chain. But all of that takes time. Mask moved really fast in China, 168 days from permit to operational factory. But that speed came with help, cheap land, tax breaks,

loans and zero tariffs. India, meanwhile, as we all know, is a whole different story. So I guess we could say that Tesla is still exploring. But exploring is a long way from committing. And even if Model Y is launched at 60 lakh rupees, thanks to reduce duty, it is entering a market dominated by Bahindra, BMW, Volvo, Kia and Mercedes. These brands already have a local component base. For Tesla to really stand out, it needs more than just a competitive price. It needs infrastructure, charging, servicing, support, and it needs affordability. and volume. Because in India,

premium is not enough. To scale, you have to go mass. But until then, Tesla might be here, but it will not be homegrown. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample

of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. To subscribe, head to the ken.com and click on the red subscribe button on top of the Ken website. Today's episode was hosted by Sniktha Sharma and edited by Rajiv Siyah.