The American electric vehicle (EV) giant has begun hiring for a dozen jobs in Delhi and Mumbai. It is also reportedly hunting for showrooms in both cities.

Asia’s third largest economy offers an interesting growth opportunity for Tesla’s futuristic cars as global EV sales plummet and competition from Chinese manufacturers gets more intense.

But there’s a million-dollar question – can Tesla compete in India’s price-sensitive market?

Tata Motors currently holds pole position in India’s EV market – with over 60% market share. MG Motors – jointly owned by India’s JSW and a Chinese firm – is second at 22%. They are followed by Mahindra and Mahindra.

EVs made by these companies cost less than half of what consumers will have to shell out – around $40,000 (£31,637) – for just the base model of Tesla. It will, therefore, be seen as a luxury car, competing with higher-end EVs made by Hyundai, BMW and Mercedes.

Simply in volume terms, this will make India a tiny market for Tesla chief Elon Musk, unless the company introduces a low-cost model specifically for the country.

Besides price, India’s road conditions could pose a challenge.

Tesla cars have very low ground clearance – or the distance between the lowest point of the car’s undercarriage and the ground. This will make adapting to Indian roads difficult. To operate in the country, existing models may have to be re-engineered – which would drive up manufacturing costs.

Will Tesla do this just for one developing market where it could have only a small presence?

“It’s been a challenge even with other global original equipment manufacturers (OEMs) at the high end with small volumes. You can’t justify these major engineering changes,” Hormazd Sorabjee, editor of Autocar India magazine, told the BBC.

Also, amidst all the hype, it is easy to forget that EV sales still make up less than 3% of overall passenger vehicle sales in India. Even critical ancillary infrastructure, like charging stations, have taken years to come up. While they have picked up pace, there are only around 25,000 charging stations across India.

In effect, Tesla will be jostling for space in a very small, albeit growing, EV market.

But at a policy level, India appears to be making every effort to woo the carmaker.

The country has outlined an ambitious national vision to go electric. It plans to have 30% of private cars, 70% of commercial cars, 40% of buses and 80% of two and three-wheelers go electric by 2030. Most provincial governments have also established their own EV policies to incentivise demand and supply.

Subsidies offered by India on electric cars are also the highest among major economies, according to HSBC Securities. They amount to as much as 46% of the price of the country’s top-selling electric car model.

It’s no surprise then that passenger EV sales have grown astronomically by over 2,000% in less than five years – going from a low base of 4,700 annually to a 100,000 cars.

“The price difference between regular cars and EVs has reduced a lot, making customers rethink their choice,” says Jyoti Gulia, founder of JMK Research.

In April last year, India also cut import taxes on EVs for global carmakers which committed to investing $500m (£400m) and starting local production within three years.

Tesla and other imported electric vehicles costingover $35,000 (£27,550) can now enjoy a lower import duty of 15% on up to 8,000 vehicles. This came after Musk complained that high import duties had prevented the firm from launching its cars in the world’s fastest-growing major economy.

“It’s quite clever, as it forces a global player to localise – which is the way the game works: come and build in India,” says Sorabjee.

The proposed policy could put Indian domestic carmakers at a disadvantage, however, given that the investment requirement for foreign players is “not significant” compared to Indian players in this segment, an HSBC research paper warns.

Import duty of 15% is also “much lower” than the tax on comparable combustion engine cars in India which also pay an additional road tax, according to HSBC.

Domestic EV players say having a “level playing field” is important, but appear unperturbed by Tesla’s impending entry for now.

“We welcome competition,” Rajesh Jejurikar, Mahindra and Mahindra’s Executive Director and CEO, told the BBC. His company feels that more players will strengthen India’s existing EV ecosystem and is working to improve the appeal of their offerings.

Critical issues like “range anxiety” – the worry whether an EV’s battery charge will be enough to complete a journey – have been addressed through “robust battery integration and rigorous real-world testing across diverse road conditions”, says Mr Jejurikar, adding that the brand is deploying cutting-edge technology into their product.

It will be hard to beat Tesla’s edge in this area though, and coupled with sturdier batteries and a better user interface, it will certainly differentiate Tesla cars from others in the market, says Sorabjee.

What might also give Tesla tailwind is the rising share of premium vehicles in the Indian auto market. As a global brand with a perceived “cool quotient”, owning a Tesla will be a status symbol for the young, aspirational Indian population.

But none of this – India’s EV policy or the growing demand for premium cars among India’s affluent – has yet led to a commitment from Tesla to put manufacturing dollars into an EV facility.

For now, it appears the carmaker will only ship units from its factories abroad.

When that changes will depend on a lot of things – how quickly India’s affluent consumer base widens, and what tariff structures look like once India completes trade negotiations with the US.

President Donald Trump has already voiced displeasure over Tesla potentially building a factory in India to avoid high tariffs. In an interview with Fox News recently, he said that this would be “unfair” to the US.

Could Trump’s ‘America First’ policy diminish Musk’s appetite for starting manufacturing units in India then?

The question is moot, but for now it does look like India will first get glitzy Tesla showrooms for its rich, rather than job-creating Tesla factories for its under-employed masses.

Bradford was recently given £3m in government funding to boost infrastructure, but some in the district fear demand will outstrip supply, deterring drivers from making the EV switch.

For Tony Maw, transitioning to EV is both inevitable and welcome.

However, he remains hesitant to trade in his hybrid for a fully electric car, citing so-called “range fear” as a key concern.

He asks: “Where can you charge your car in rural communities?

“People cannot necessarily even park by their house, they have to park up against a wall somewhere.”

There isn’t a single on-street rapid EV charger in his village of Oxenhope, near Keighley, he says.

“When I was going hybrid, I needed a charging point at home because you don’t get a great deal of mileage on electric with a hybrid.

“Some people have the opportunity to do that, but those in other places can’t.”

The government aims to install 300,000 chargers in the UK by 2030, but fewer than 100,000 are currently in operation.

“The number of chargers needed is probably going to exceed the current plans,” he adds.

Rebecca Poulsen, a councillor for the Worth Valley area which includes Oxenhope, says there is an urgent need for local authorities to “look at the gaps in charging”.

“Commercial operators install big charging schemes in urban areas, but in smaller villages even one or two chargers could make the difference in whether people decide to get an electric car or not,” she says.

“New technology is coming, on-street charging on street lights or under pavements for example, but we need to ramp up efforts.”

The Labour-run Bradford Council has secured central funding to install 1,000 new chargers at more than 200 underserved locations, with the areas yet to be confirmed.

Poulsen, Conservative group leader on the local authority, adds: “If a village has just one charger and it’s broken, how far is it to another?

“People need confidence that they can charge their vehicles.”

Department for Transport figures show 73,334 public chargers have been installed nationwide so far as of 1 January 2025, with 19,657 built during 2024.

But the data also shows that Yorkshire and the Humber is the worst served UK mainland region per 100,000 of the population, alongside the North West.

Both regions have just 66 EV points per 100,000 of the population.

The government has launched initiatives to accelerate the UK rollout, including £450m of Local Electric Vehicle Infrastructure (LEVI) funding.

However the scrapping of road tax exemptions for EV is set to be pushed through from April, with tension between manufacturers and ministers in recent months over targets.

Differences in cost between public and at-home charging has also been a major factor.

Philip Douglass, who is leading a Vauxhall campaign to improve access to EV charging for those who don’t have a driveway, says: “We found that 40% of UK households don’t have a driveway, but 80% of charging happens at home.”

The driveway figure rose to 60% in places like Bradford, with the district’s terraced streets and remote villages proving a challenge.

“Only 25,000 of the 75,000 [UK] public chargers are in residential areas, which is where we need them most,” Mr Douglass adds.

The campaign wants everyone to be living within a four-minute walk of an on-street charger as soon as possible.

Some private sector interventions are making a quiet impact, with a new super-fast charging hub on a hotel site off the M606 in Bradford featuring 16 units in total, and another rapid hub nearby operating out of a drive-through bakery shop car park.

Yasir Hafeez, who bought his EV six weeks ago through a work salary sacrifice scheme, currently makes a 20-mile round trip from Halifax to charge in Bradford.

“I used to have a diesel, which was very expensive – £300 a month just on fuel, plus road tax and insurance,” he says.

“This one is much cheaper.”

He agrees about the lack of on-street charger coverage, adding: “I have to come here to charge my car.

“There’s no supercharger near me.”

Wayne Topley, managing director of the Cedar Court Hotel, says hosting the super-fast charging station is a decision to help “futureproof” the business.

“Being an EV owner myself, I do have range anxiety and I have to plan ahead for charging on long journeys,” he says.

“I don’t think it will be long before we start seeing trucks on the road with large battery capacity, and having central locations like this will really help build confidence for longer journeys.”

While the increase in larger, rapid charge locations near key roads is helping in the EV push, many feel its overall success begins at home.

Mr Douglass concludes: “If we don’t get electric vehicle infrastructure in that near-home space, we risk creating a two-tier vehicle market where some people can get the latest technology and some people can’t.”