Team siliconindia

• Tesla to open first India showroom in Mumbai on July 15, marking a major step toward its EV sales in the country with initial imports of Model Y.
• M&M shares drop nearly 2%, despite being a leading EV player, as Tesla's entry intensifies competition in the electric SUV market.
• Bosch shares rise over 3%, with other Tesla-linked Indian suppliers in focus, as Tesla assures continued procurement despite potential US tariffs.

In a move poised to reshape India’s electric vehicle (EV) landscape, Tesla has announced the opening of its first showroom in India an ‘experience center’ in Mumbai on July 15. The announcement, viewed as a significant step toward Tesla’s long-anticipated entry into the Indian market, sent ripples across the domestic auto sector on July 11, with Mahindra & Mahindra (M&M) shares falling nearly 2 percent in early trade. The Nifty Auto index also reflected the bearish sentiment, declining by 0.7 percent.

Meanwhile, shares of Tesla-linked component supplier Bosch surged over 3 percent, riding the positive sentiment generated by Tesla’s official entry. Indian auto part suppliers such as Samvardhana Motherson International, Suprajit Engineering, Sona BLW Precision, and Varroc Engineering also linked to Tesla’s supply chain were under the spotlight, as Tesla reaffirmed its commitment to procurement from Indian vendors despite potential tariff increases by the United States under President Trump.

According to a July 10 report by Moneycontrol, Tesla has assured Indian suppliers that their business relationship will remain unaffected by any trade levies, helping alleviate concerns among domestic partners about future volatility.

Though M&M faced selling pressure on July 11, the company has been a dominant force in the Indian EV and SUV market. According to JATO data shared by M&M, it emerged as the largest electric SUV and overall SUV player by revenue share in the March quarter. However, Tesla’s entry is likely to heighten competition, especially in the premium EV segment.

M&M has laid out an aggressive roadmap to solidify its position. The automaker plans to roll out three internal combustion engine (ICE) vehicles, two EVs built on a new dedicated platform, and two light commercial vehicles (LCVs) by calendar year 2026. A new platform vision is expected to be unveiled on August 15, 2025, with product rollouts beginning in 2027. Automotive CEO Rajesh Jejurikar has stated that the company is expanding into Tier I, II, and III markets, steadily increasing EV deliveries nationwide.

Jejurikar, in a May 2025 interaction, emphasized a measured approach to ramping up EV production. "This is a business which we don't want to be rash and ramping up for two reasons. One is, there is a lot of product complexity. We are learning new technologies as we ramp up and so are our suppliers. So, we have to be very cautious in the way we ramp up production", he said.

Meanwhile, a market note from HDFC Securities on July 11 forecasted softer demand trends in both domestic and global auto markets. While Mahindra continues to gain traction in utility vehicles (UVs) and tractors, TVS Motors could emerge as a beneficiary due to its strong portfolio of ICE and electric offerings.

Tesla, for its part, is initially bringing in fully-built units of its popular Model Y SUV currently the world’s best-selling EV from its Shanghai facility. Bloomberg reported on June 20 that five Model Y vehicles had arrived in Mumbai, likely at an import duty of 70 percent. Tesla has also brought in Supercharger hardware, accessories, merchandise, and spares from the US, China, and the Netherlands.

India’s steep import tariffs have been a longstanding deterrent to Tesla’s expansion. The company has been negotiating a balance between government policies that favor local manufacturing and its own plans for market entry. "India has a big middle class, which we would want to tap into. But, again, these kinds of things [tariffs] create a little bit of tension which we’re trying to work around", Tesla CFO Vaibhav Teneja had said during the Q1 2025 earnings call.

As of now, Tesla has yet to appoint a new India head following the exit of its previous country leader. The company is reportedly finalizing another showroom in Delhi’s Aerocity and scouting locations for an office in Bengaluru.

The development follows a high-profile meeting between Tesla CEO Elon Musk and Indian Prime Minister Narendra Modi earlier this year in the US, where the two leaders discussed strengthening ties between American tech firms and Indian manufacturing capabilities.

Currently, electric vehicles make up just over 5 percent of India’s passenger vehicle sales. Premium cars still constitute less than 2 percent of total market volumes. While Tesla’s foray adds to the premium EV choices available to Indian consumers, price sensitivity and regulatory hurdles remain key challenges.

As India prepares for a new era in clean mobility, Tesla's arrival is both a signal of global confidence in the country’s automotive ecosystem and a wake-up call for domestic automakers to accelerate innovation and production readiness.