[Auto] Tesla Is Going to India: What to Expect

[Ryzen2]

is going to India. The Silicon Valley-based automaker plans to begin offering its Model 3 sedan to Indian customers early next year, according to India's transport minister, Nitin Gadkari. 

India's auto market has huge potential, but it's also one of the most price-sensitive in the world. How will Indian consumers -- accustomed to inexpensive small cars -- respond to Tesla's powerful-but-pricey vehicles? Can the company duplicate its China success here?

What we know about Tesla's plans

We've known for a while that Tesla has been planning to enter the Indian market. CEO Elon Musk seemed to confirm those plans in a tweet in October. 

But if anyone outside Tesla would know the full story, it's Gadkari. The transport minister told the national daily newspaper Indian Express that Tesla plans to "start operations" in the country in early 2021, beginning with sales of imported Model 3s. The company will consider manufacturing in India, Gadkari said, but wants to wait to see how how the market responds before making further plans. 

Separately, India's Economic Times reported that deliveries of imported Model 3s aren't expected to start until the second half of 2021, though Tesla will likely begin taking orders soon, possibly in January. 

TESLA PLANS TO OFFER ITS MODEL 3 IN INDIA STARTING EARLY NEXT YEAR, ACCORDING TO MULTIPLE REPORTS. IMAGE SOURCE: TESLA.

That all sounds good, but there's one sobering note: Both newspapers reported that the India-market Model 3 is likely to start at about 55 lakh rupees. A lakh is 100,000 rupees, so that's 5.5 million rupees, or just under $75,000 at current exchange rates.

In India, 55 lakh is a lot of money for a car. Like, a whole lot. 

India isn't like other markets

India's new-vehicle market isn't like China's or Europe's or really anywhere else's. Maruti Suzuki, a local subsidiary of Japan's Suzuki (OTC:SZKMF), has captured almost 50% of the market with locally made versions of Suzuki's small, affordable cars. Maruti's bestseller is the Swift, a small hatchback with a starting price of 5.19 lakh -- about $7,000. Most Maruti Swifts sell for a bit more, but not a lot more.