JSW Chairman Sajjan Jindal’s Declaration On Tesla’s India Foray, “Elon Musk Can’t Be Successful In This country, Because We Are Here”; Is He Right?

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JSW Group Chairman Sajjan Jindal, a key player in India’s industrial ecosystem, has openly questioned Musk’s ability to thrive in India, stating that homegrown champions Tata Motors and Mahindra & Mahindra are too deeply entrenched for Tesla to make a real dent.

Elon Musk and Tesla have been eyeing the Indian market for a few years, and now, with a prime showroom space leased in Mumbai and hiring underway, it seems like Tesla is finally making its move. But not everyone is convinced that the EV giant will find success here.

Jindal’s Bold Statement

Speaking at the Ernst & Young Entrepreneur of the Year awards, Jindal didn’t hold back saying

“Elon Musk is not here. He is in the US. We Indians are here. He cannot produce what Mahindra can do, what Tata can do—it’s not possible. He can do (it) under Trump’s shadow, in the US. He’s super smart, no question about it. He’s a maverick, doing spacecraft and all that. He’s done amazing work, so I don’t want to take anything from him. But to be successful in India is not an easy job.”

It’s a big claim, but does it hold water?

While Tesla might be the biggest name in the global EV market, it seems India’s own players aren’t backing down.

Tata Motors, the dominant force in the Indian EV space, has already crossed 2 lakh EV sales. It continues to roll out attractive incentives, such as exchange bonuses, 100% financing, and free charging perks. Although, its market share has slightly dipped from 73% to 62%, it still reigns supreme.

Then there’s Mahindra & Mahindra, which has made its stance crystal clear. Anand Mahindra, the company’s chairman, drew parallels to the 1991 liberalisation era when foreign brands like Ford and Hyundai entered the market.

“We have not just survived, but we continue working like maniacs to remain relevant even a century from now. With your support, we will make it happen.”

Mahindra’s new EVs, the XEV 9e and BE 6e, have already generated significant buzz, further solidifying the company’s position.

Will Tesla’s India Plans Work?

Tesla’s biggest challenge in India is not only about competition instead it’s the country’s complex market dynamics. India’s EV ecosystem is still evolving, with charging infrastructure, pricing, and government policies playing a crucial role.

Historically, global auto giants haven’t had the easiest time in India. Just ask Ford, General Motors, or even Volkswagen, all of whom struggled to crack the price-sensitive and highly competitive Indian market.

Tesla’s luxury positioning could also be a hurdle. While its cars are aspirational, India’s biggest EV adoption is happening in the sub-₹20 lakh segment, where Tata and Mahindra dominate. Even if Tesla starts local manufacturing, achieving price parity with homegrown brands won’t be easy.

So, Is Sajjan Jindal Right?

Jindal’s confidence in India’s local automakers is justified, both Tata and Mahindra have built formidable positions, and India’s market has unique challenges that Tesla will have to manage. However, underestimating Musk has historically been a risky bet. If Tesla can crack the price game, set up strong charging infrastructure, and leverage India’s push for EVs, it might just prove Jindal wrong.

Tesla India Move

Meanwhile, Tesla has just signed a lease for a 4,003-square-foot showroom in Mumbai’s Bandra Kurla Complex, a prime business hub. The five-year lease, starting in February 2025, will cost Tesla about $446,000 in its first year, rising by 5% annually. The showroom is located near an Apple retail store at Jio World Drive, owned by billionaire Mukesh Ambani’s Reliance.

Tesla has also started hiring for key positions in India, including store managers, service staff, and customer engagement professionals. However, the company has not yet announced any plans for local manufacturing, a key hurdle in the price-sensitive Indian market where high import duties make foreign EVs significantly more expensive.

One of the biggest challenges for Tesla in India is the country’s steep import duties. Currently, fully built imported EVs attract tariffs exceeding 100%, a point Musk has frequently criticised.

The US government has also been pushing India to lower tariffs on car imports under a proposed trade deal. However, New Delhi remains hesitant to slash duties too drastically, wary of undercutting its own EV manufacturing push.

India has introduced the Scheme to Promote Manufacturing of Electric Passenger Cars (SMEC), which allows companies investing a minimum of $500 million in local production to import high-end EVs at a reduced 15% tariff for five years. This could offer Tesla a pathway into the market without immediately committing to full-scale local production.

While this policy is designed to bring in foreign investment, it has drawn sharp criticism from Indian automakers, who argue that it disproportionately benefits international players while demanding steep investment commitments from domestic firms.

The government is considering an on-tap facility to allow companies to test the market before committing to manufacturing, with application windows reopening multiple times. This flexibility could benefit Tesla, allowing it to evaluate demand before setting up local production.

Tesla's Grand Entry into India

Can Tesla Succeed in India?

Just as the excitement is building for Tesla’s arrival in India, a UBS brokerage report has thrown cold water on the hype.

Although interest in the Elon Musk-led company remains strong, the report states the significant challenges Tesla will face in the Indian automobile market – from import tariffs and fierce domestic competition to the high cost of its EVs, Tesla’s impact in India may be far more limited than expected.

Tesla’s long-awaited India debut is expected as early as April 2024, with initial imports from its German plant.

Based on the UBS report, currently, the most affordable electric vehicle in the Tesla lineup is the Model 3, which costs around $35,000 (over Rs 30 lakh). Strictly speaking, the price itself is beyond the reach of the mass-market car buyers. The other point to keep in mind is practicality and the Model 3 has a low ground clearance of 138mm, which is going to be a challenge on Indian roads.

A lot has been spoken about how the Model 3 could go up against Mahindra’s flagship EV, the XEV 9e, but technically, it’s like comparing apples and oranges as the Tesla is a sedan while the latter is a full-size SUV. To counter the Mahindra juggernaut, Tesla can bring in the Model Y, which could go over Rs 50 lakh, while the ex-showroom of the top-of-the-line XEV 9e is under Rs 30 lakh.

According to the UBS report, Tesla will be present in the luxury segment and will compete against the likes of “high-end EVs such as the Kia EV6, BYD Seal, and Hyundai Ioniq 5 collectively sell fewer than 200 units per month. Since Tesla’s Model Y falls into the same premium price range, it is unlikely to generate significant sales volume.”

Moreover, Tesla has confirmed that it will initially bring its EVs into India by import way rather than local manufacturing.

Reports suggest that Tesla is in the hunt for land to set up its manufacturing facility and states like Gujarat, Maharashtra, Tamil Nadu, and Andhra Pradesh could be an option for the EV maker as without local production, Tesla will not be able to compete with domestic brands.

Tesla analyst Joseph Spak believes that the company’s India strategy will remain focused on imports, further reducing its potential market impact.