Why buying a Tesla in India might be a very bad idea

(Last Updated On: April 12, 2016)

Felt like riding a bullock cart driving my Honda CRV to work today morning. Thanks Tesla!

This whole Tesla thing came into my radar when they launched Roadster sometime back in 2010, but I, along with many other myopic guys brushed it aside for a toy. I could see that electric cars were the future but I thought of them more as a thing of the future. One of my friends had thought otherwise. In 2014, he said he made a killing on their stocks when he bought it in two digits sometime in 2012. Then it struck me, although late, that this was history in the making.

Yesterday, the Model 3 was revealed and boy, all my doubts were cleared. I realized we’re living in the “future”. I mean $35K? Every other “premium” car that I know of suddenly faded off from the spotlight.

And my friend Amit Bhawani, just booked the first Tesla in India. First, I thought it’s an April fools prank (Tesla launching in India) but this tweet from Elon clarified it. While this was exciting news, I’m not entirely sure if it is a good idea to buy a Tesla in India. Reasons below.

1. You’ll end up paying for two cars but get one!

India recently hiked its import duties from 10% to a whopping 35% on imported vehicles to help aid Indian automobile industry. So, in addition to the $35,000 for the basic, no-options model, Indians will have to spend a big amount (almost 85% extra on base price) on import duties.

Tesla’s cheapest model (base no-options model) actually costs $35k, but in India, it could cost more than Rs 50 lakhs, at current exchange rate. Hmm, I sure can see the value in the car but having to pay double the price is a bummer!

Update: The actual cost could be up to 72K INR (~$100,000 INR). (Via Reddit r/India). Price calculated via http://www.dutycalculator.com/country-guides/Import-duty-taxes-when-importing-into-India/.

2. Charging could be a (serious) problem in India.

Electric cars as a concept in India is still at a very nascent stage. India’s first electric car Mahindra e2o costs about Rs.5 Lakhs ($5,000) and is still to establish itself. Most people perceive electric cars to be low performers in India. Although Tesla has proved it wrong, getting the message across will be a challenge in India. On top of that, Teslas has to provide its own charging network. Although Tesla mentioned that it would come with a super charger network in India, how will India’s electricity standards and Tesla’s requirements play along? Given that electricity in India is not “reliable” in India, there are concerns. Perhaps this is an easily fixable solution, but still, the fact that we don’t have any information on this is still concerning.

Update: Elon’s tweet regarding having super chargers in India.

3. Auto-pilot in India? Hello Madness.

Accept it, driving in India is a whole different experience. I’m not sure how Tesla is going to handle it. Perhaps they might get it right with a lot of programming but given the road conditions and driver sensibilities in India, I’m not putting my Tesla on auto-pilot. Of course, freeways/highways are different but I hope the infrastructure in India get better and more suitable for controlled driving when the car becomes available.

4. Tax Breaks?

This is probably not a compelling factor even for Tesla owners but is a good thing to have in the US. A $7,500 federal income tax credit is available to all Tesla owners in the US and several states offer additional incentives, often taking the form of a rebate. India still doesn’t have any such perks for electric vehicle owners and I do not know if there is anything coming up.

In summary, I think buying a Tesla in India is not a great idea for now. Mostly because of the uncertainties. It’s a great value car and the price is great. But the lack of infrastructure, the insane import duty prices (for the owner) and market viability issues still make it a risk. Perhaps a risk worth taking. We’ll have to wait and watch.