Refunds, Job Postings Indicate Tesla's Entry into Indian Market is Near Adding to the rumours of its imminent launch in the Indian market are Tesla's posting of new job openings on its careers page for a store manager, sales advisor, and service manager in New Delhi

Elon Musk-led US electric vehicle manufacturer Tesla Inc. is issuing refunds to customers who had pre-booked its Model 3, according to a Bloomberg report. The report states that the issuance of refunds signals the nearing of Tesla's entry into the Indian market.

As informed by the Union Minister for Road Transport and Highways, India has surpassed Japan to become the third-largest automobile market.

According to the emails obtained by Bloomberg, the premium EV manufacturer wrote to its customers who had made the bookings in 2016: "We would like to return your reservation fee for the time being. When we finalize our offerings in India, we will reach out in the market again. We hope to see you back with us once we are ready to launch and deliver in your country."

Tesla is making the refunds as it phases out the earlier generation of the Model 3. "The move suggests a clearing of the decks before new models are officially launched in India, following years of hesitation due to high import duties," the Bloomberg report stated.

Adding to the rumours of its imminent launch in the Indian market are Tesla's posting of new job openings on its careers page for a store manager, sales advisor, and service manager in New Delhi, along with a charging infrastructure developer in Mumbai.

According to an Economic Times report, Tesla has rented office space in Mumbai's Bandra Kurla Complex area, signalling that the company has decided to start operations in India soon. As per the report, the company has signed a tenancy lease for a 30-seat workspace.

A few days back, Tesla's Musk had said in a post on X that he'll visit India later this year, at a time when India is negotiating a trade deal with the US, which may involve lowering tariffs on automobiles.

Recently, Tesla's Chief Financial Officer (CFO), Vaibhav Taneja, had said that the company was aggressively trying to enter India but termed the country as "a very hard market".

"And especially under the current tariff structure in India, any car we send in is subject to a 70% import duty, plus a 30% luxury tax. So, the same car becomes 100% more expensive than what we sell it for elsewhere," Taneja said during the company's Q1 earnings call.

He said that while the customers would feel they were overpaying for the vehicle, the additional cost was not even going to the company but the local government.

"That's why we've been very careful in figuring out the right time. India has a big middle class that we'd love to tap into — it would be a great market. But current policies create friction we're still trying to work around," he added.

As per consulting firm Frost and Sullivan's report, the Indian government's new EV policy, announced in March 2024, could ease Tesla's entry. Under this policy, automakers investing at least $500 million in local manufacturing can import 8,000 vehicles annually at a reduced 15% import duty. If approved, this policy could make Tesla's cars more affordable. Against the backdrop of such developments, Tesla's Berlin factory is initially expected to produce right-hand-drive Tesla Model Y units for the Indian market until such time as the company can establish local manufacturing facilities.

"India's EV market is poised for strong growth. A recent report from the India Energy Storage Alliance indicates that India's cumulative EV sales crossed 4.1 million in FY 2023-24 and estimates the total number of operational EVs to exceed 28 million by 2030. This growth potential is a lure for Tesla which saw a sales drop in 2024, after more than a decade of growth," wrote Sathyanarayana Kabirdas, Vice President – Mobility, Frost and Sullivan.