1. High Import Duties
India imposes high import taxes on fully built electric vehicles (CBUs). For example, EVs costing above $40,000 face a 100% import duty, making Tesla’s cars twice as expensive. Even for lower-priced EVs, the import duty is 70%, making global EVs unaffordable for most Indians.
2. Lack of Local Manufacturing
Unlike Tata Motors and Mahindra, Tesla and BYD do not have a local production facility in India. The Indian government insists that global automakers set up factories locally to benefit from lower taxes, but Tesla has been hesitant due to market uncertainty.
3. Price-Sensitive Market
The Indian automobile market is highly price-sensitive, with most EV buyers looking for options under ₹20 lakhs. Tesla’s entry-level model costs well above this, making it unaffordable for the masses. Meanwhile, Indian players like Tata, MG, and Mahindra dominate the budget EV segment.
4. Underdeveloped Charging Infrastructure
India’s charging infrastructure is still in its early stages. While Indian EV brands focus on city-based EVs with limited range, Tesla and BYD’s long-range EVs require a strong fast-charging network, which is currently lacking outside metro cities.
5. Local Competition & Government Push for Domestic Brands
Indian brands like Tata Motors, Mahindra, and MG dominate the EV market with affordable, localized solutions. The government’s “Make in India” initiative favors domestic manufacturers, offering incentives for local EV production and battery manufacturing.
6. Policy Uncertainty
The EV policy in India keeps changing, with different incentives, duties, and regulatory shifts. Tesla demanded lower import taxes before committing to local production, but the government refused, leading to uncertainty for global players.
7. BYD’s Geopolitical Challenges
BYD, a Chinese company, faces additional geopolitical risks. The Indian government is cautious about allowing large-scale Chinese investments, slowing BYD’s expansion plans.
Conclusion
Tesla and BYD can only compete in India if they localize production, launch budget-friendly models, and invest in charging infrastructure. Until then, domestic brands will continue leading the Indian EV market. 🚗⚡
