Despite growing speculation around Tesla’s entry into India and the expansion plans of global EV players like BYD, auto industry analysts believe their impact on the country’s passenger vehicle (PV) market will remain minimal in the near to medium term. High pricing, policy restrictions, and localisation challenges are expected to limit their market penetration.
Tesla’s India entry is expected to be slow and limited due to high pricing. Its planned affordable M3/Y variant, expected at ~$30,000 post-subsidy in the US, remains expensive for India, especially with 15 per cent import duties. Local production is unlikely unless prices drop below $30,000 for it to have mass-market appeal, said Kumar Rakesh, Analyst – IT & Auto at BNP Paribas Securities India Pvt Ltd.
Also, auto analysts at Anand Rathi Share and Stock Brokers Ltd say other Tesla models, including the Model Y ($31,500), Model X ($78,500), and Model S ($74,000), are priced even higher. The US EV giant is yet to launch an affordable model globally.
Tesla abandoned plans for a low-cost Model 2 a year ago, shifting focus to Robotaxi and robotics. Its proposed ‘unboxed’ assembly process and Mexico plant have also been shelved, making a budget model for India unlikely. “Musk has said a $25,000 car is unnecessary in a Robotaxi-driven future. Tesla is expected to serve India through exports from existing plants, keeping volumes low for the foreseeable future,” said Kumar.
Beyond Tesla, competition from Chinese and Vietnamese EV makers is also expected to be limited due to policy and market challenges.
While China’s BYD is a global leader in electric vehicles, investment restrictions in India limit its expansion. “BYD has the potential to grow if it finds the right partner in India. It is currently the world’s No. 1 player in electrified vehicles,” said Puneet Gupta, Director, S&P Global Mobility.
MG Motor India (now JSW MG) has struggled to gain traction, holding just a 1.5 per cent market share in FY25 due to investment restrictions and a small EV market.
The Vietnamese EV maker is setting up a factory in Tamil Nadu with a capacity of 150,000 units. This is expected to be ready by late 2025 and it plans to launch the VF6 and VF7 SUVs ahead of the 2025 festive season. However, analysts remain cautious about its financial stability. “The company’s stock has dropped 80 per cent since listing, raising concerns over long-term sustainability,” noted analysts at Anand Rathi.
India’s new EV policy allows import of vehicles priced above $35,000 at a reduced 15 per cent duty, but caps annual imports at 8,000 units. The premium PV segment (above ₹30 lakh) is small, with only 45,000 units sold annually — 80 per cent of which are controlled by unlisted Toyota. This further limits the growth potential for high-end EV makers like Tesla.
Given these factors, India’s PV market is expected to remain largely insulated from fresh EV disruptions, with established automakers continuing to dominate the landscape.
Sales of electric passenger vehicles (including SUVs and cars) stands at about 96,000 units so far this fiscal year, up from 91,000 units in FY24. Tata Motors continues to lead the market with nearly 52,800 units sold, followed by MG Motor with over 26,700 units. Mahindra & Mahindra has recorded sales of more than 6,200 units, while BYD and Citroën have sold 3,064 and over 1,840 units, respectively.
