Tesla Teams Up with DLF to Renew Hunt for Showroom Space in New Delhi

Elon Musk's Tesla has revived its plans to enter the Indian market, resuming its search for showroom space in New Delhi. This comes after Tesla had previously paused its investment plans earlier this year. According to two sources cited by Reuters, this is the first indication that Tesla is reconsidering its entry into India, signaling renewed optimism about the potential of the Indian market.

Aborted Investment Plans Earlier in 2023

In April, Musk planned a visit to India to meet Prime Minister Narendra Modi and potentially announce an investment of $2-3 billion. However, the visit was called off at the last moment due to Tesla's decision to cut 10% of its global workforce amid declining sales. This marked a temporary halt to Tesla's India ambitions.

Discussions with DLF for Prime Showroom Locations

Tesla is now in early-stage talks with real estate giant DLF to secure a suitable showroom space in the Delhi-NCR region. The company is evaluating multiple locations, including DLF’s Avenue Mall in southern Delhi and the Cyber Hub office and retail complex in Gurugram. Tesla is reportedly exploring an 8,000-square-foot space in Avenue Mall, which already hosts outlets for global brands such as Uniqlo, Mango, and Marks & Spencer.

India’s EV Policy and Market Challenges

Tesla’s exploratory talks come amidst ongoing deliberations about its operational strategy in India. It remains unclear whether Tesla will opt to import vehicles at the steep 100% tax rate or align with India’s revised EV policy. The new policy, aimed at attracting automakers, offers reduced import duties of 15% for certain EV models.

India's EV market is still in its infancy, accounting for only 2% of the country’s total car sales of 4 million last year. However, the Indian government aims to expand this share to 30% by 2030, making the market more attractive for global EV giants like Tesla.

Starlink's Parallel Plans in India

Interestingly, Tesla's showroom hunt coincides with Musk’s other venture, Starlink, also exploring its entry into the Indian market. Starlink recently succeeded in a lobbying battle against Mukesh Ambani over spectrum allocation policies, further underlining Musk's broader interest in tapping into the Indian market across different sectors.

The Road Ahead for Tesla in India

While Tesla’s efforts to secure showroom space indicate a renewed interest, the discussions are still exploratory, with no final decisions made yet. The company’s next steps will likely depend on resolving challenges related to India’s tax policies and the feasibility of scaling operations in a market with modest EV penetration. Meanwhile, the Indian government is actively relaxing certain policy provisions to attract major automakers, creating an environment conducive to Tesla’s entry.