According to sources familiar with the discussions, Tesla Inc is looking for locations to open showrooms in three Indian cities, and has hired an executive to lead its lobbying and business activities, ahead of its expected entry into the market. In January, Tesla registered a local company in India, where it plans to import and sell the Model 3 sedan by the middle of 2021, aiming to appeal to wealthy buyers in a niche market.
Three sources said the world’s most valuable automaker is looking for commercial properties ranging from 20,000 to 30,000 square feet, each in the capital New Delhi, financial hub Mumbai in the west, and tech city Bengaluru in the south to open showrooms and service centres.
Separately, two other sources said t Tesla, that the company has hired Manuj Khurana, a former executive of India’s investment promotion body, Invest India, to lead its policy and business growth efforts in the region. Khurana refused to comment after Tesla did not respond to a request for comment.
Tesla CEO Elon Musk said on Twitter in October that the company would join India “for sure” in 2021, despite the billionaire’s previous statements to the contrary. Tesla is moving faster, as shown by the search for showroom space and Khurana’s appointment. CBRE Group Inc, a global property consultancy retained by Tesla for showroom searches, has been surveying locations for several weeks and is focusing on locations, that will offer the company better access to wealthy buyers, according to sources.
Some luxury car showrooms in upmarket areas of metro cities are between 8,000 and 10,000 square feet, but in India, where high-end real estate space is in short supply, and property prices in New Delhi and Mumbai are among the highest in the world, most showrooms are much smaller.
If you visit one of Tesla’s showrooms around the world, you’ll notice that they’re similar to experience centres. It would consider re-creating it with some changes for the Indian market according to one of the sources, who asked not to be named because the discussions are private. CBRE said that it does not comment on “work we might be doing for our clients.”
Khurana served on a government panel on the future of transportation that was chaired by Prime Minister Narendra Modi’s top scientific advisor. According to two reports, he is also in charge of Tesla’s market entry phase in India, in his new position. However, India is unlikely to be an easy market for Tesla to break into.
The country has no charging infrastructure and high import taxes on automobiles, as well as low electric vehicle adoption (EVs). Just 5,000 electric vehicles were sold in India last year, out of a total of 2.4 million cars sold, while 1.25 million new energy vehicles were sold in China. Analysts claim that as the government focuses more on promoting clean vehicles, India’s growing number of affluent customers makes it a market, that the automaker can’t ignore.
Though Tesla intends to import cars initially, Nitin Gadkari said Reuters last month that the government is willing to provide incentives to ensure Tesla’s production costs are lower than in China, if it commits to local manufacturing.
