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With declining sales of electric vehicles (EVs) in the US and Europe, EV manufacturers across the world are shifting to India. Global players are accelerating into India’s growing EV market.  The entrance of Elon Musk’s Tesla, Vietnam’s VinFast, and China’s Leapmotor is creating a place of war for the EV industry in India. India is already the third-largest car market in the world and is expected to become the largest by 2030. The government believes that 30% of car sales will be made by electric cars, a huge leap from just 2.5% in 2024. However, entering the Indian auto market is not an easy task for any manufacturer, especially in a new segment. The major challenges for EV manufacturers in India are price-conscious buyers, limited charging infrastructure, and high import duties, which restrict EV manufacturers from entering India.

 

 

Tesla entered India in July 2024 with its Model Y SUV. Priced at around US$70,000 due to import duties of up to 110%, it will cost almost twice its US price in India.  The car has established its first operating store in Mumbai and is currently operating in Mumbai with plans to expand to Delhi. At present, Tesla is assessing market reactions before designing its strategy for the Indian car market. While Tesla has ruled out local manufacturing for now, its arrival has drawn attention to India’s EV potential.

 

VinFast, named one of Time’s 100 most influential companies in 2024, is adopting a different strategy. Its premium SUVs, priced between 1.8 million and 3.5 million rupees, are more affordable for Indian buyers. The Vietnamese automaker has already opened showrooms in Gujarat and Tamil Nadu and is setting up a large assembly plant in Tamil Nadu capable of producing 50,000 vehicles annually.

 

China’s Leapmotor has also entered into a partnership with Stellantis, which will assemble its EVs locally. This aligns with India’s strategy of encouraging foreign automakers to invest in domestic assembly and manufacturing, strengthening the local EV ecosystem. Despite the entrance of international manufacturers in the Indian auto market, domestic automakers continue to dominate. The electric car market is dominated by Tata Motors, followed by MG Motor and Mahindra & Mahindra. Analysts note that while global brands bring innovation and prestige, Indian buyers remain focused on affordability, value, and features.

 

The government is supporting the shift with incentives and infrastructure expansion. From just 12,000 charging stations in 2024, India aims for 3.9 million by 2030. New policies, such as reduced customs duties for automakers investing in local manufacturing, are also designed to attract global brands. As global automakers enter the market and domestic giants expand their line-ups, India is positioning itself at the centre of the EV revolution. While challenges such as pricing, infrastructure, and consumer adoption remain, the government’s push and rising demand show strong momentum. The coming decade will determine whether India can transform from a growing EV market into a true hub for electric vehicles, not just for its own needs but also as a manufacturing and export powerhouse.