Tesla Resumes Showroom Space Search in New Delhi
By Aditi Shah and Aditya Kalra
NEW DELHI (Reuters) – Tesla, led by Elon Musk, has restarted its search for showroom space in New Delhi, indicating a potential reconsideration of entering the Indian market after halting investment plans earlier this year.
In April, Musk planned to meet Indian Prime Minister Narendra Modi to announce a potential investment of $2-3 billion in India. However, he called off the visit last minute amidst Tesla's decision to lay off 10% of its staff due to declining sales.
Currently, Tesla, which had paused its search in recent months, is engaged in early discussions with DLF, India's largest property developer, to secure a location in the capital region, according to two sources with direct knowledge of the situation. However, it remains unclear if these discussions will result in a deal, as Tesla is also talking to other property developers.
One source mentioned that Tesla is looking for around 3,000 to 5,000 square feet (280-465 square meters) to create a consumer experience center, alongside a significantly larger space for its delivery and service operations. Possible locations include DLF's Avenue Mall in southern Delhi and the Cyber Hub office and retail complex in Gurugram.
Notably, several foreign retailers, such as Japan's Uniqlo, Spain's Mango, and Britain's Marks and Spencer, already have outlets in Avenue Mall, where Tesla aims to secure 8,000 square feet for its showroom.
Despite the ongoing search, it is still in an exploratory phase with no final arrangements yet. It remains uncertain whether Tesla will opt to import vehicles at the high tax rate of up to 100% or consider investment commitments under India’s new policy, which could enable reduced import tariffs for certain EVs at 15%.
In light of Tesla's previous lack of follow-through on investment plans, the Indian government is attempting to relax specific provisions of its policy to attract automakers like Hyundai and Toyota, which have shown preliminary interest.
India's EV market currently represents only about 2% of the total car sales, amounting to 4 million last year. However, the Indian government aims to increase this market share to 30% by 2030.
This showroom search coincides with Musk's Starlink also considering entry into India after successfully lobbying for spectrum allocation against billionaire Mukesh Ambani.
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