Photo Courtesy: freemalaysiatoday.com
07 Feb 2025
Highlights at a Glance
- Tariff cut: Import duty slashed from 110% to 15%.
- Tesla’s entry: Advanced EV tech and competitive pricing.
- BYD’s appeal: Affordable, robust, and innovative.
- Premium EV showdown: Comparing models in the Rs 20–50 lakhs range
- Detailed specs: Range, battery capacity, and lithium-ion technology explained
- Updated track record: Tesla and BYD production/sales data for last five years.
- Domestic boost: How Tata and Mahindra models are stepping up.
The Change which Matters
India’s automotive scene is on the verge of a major transformation. In a bold policy move, the government has reduced the import tariff on foreign-made cars from a sky-high 110% to just 15%. This change isn’t just about numbers—it’s a clear signal that India is ready to welcome global EV players like Tesla and BYD.
In this article, we take a close look at what this means for the market. We’ll examine the disruptive potential of Tesla and BYD, estimate their prices for the Indian market, compare their technical specs, and see how domestic giants like Tata and Mahindra are getting ready to compete. Let’s dive in.
1. Background: Tariff Reduction and Its Strategic Implications
A New Policy Era
For many years, India protected its local automotive industry with an import duty of 110% on fully built vehicles. While this measure supported local manufacturing, it also meant that foreign-made cars were far beyond the reach of most buyers.
Now, with the tariff cut to 15%, the government is making a strong statement: it’s time for technology, innovation, and competition. This new policy not only makes it easier for Tesla and BYD to enter the Indian market but also aims to bring more advanced EVs to consumers at a fair price.
Diplomacy and Vision
The tariff revision came on the heels of high-level talks during PM Modi’s US visit. Although details were kept under wraps, it’s clear that the government is keen to invite global expertise and investments into the country’s electric vehicle ecosystem. This move is set to boost technology transfer, encourage local innovation, and help India meet its ambitious environmental goals.
2. Tesla’s Entry: How Disruptive, it can Be?
Tesla’s Global Impact and Recent Track Record
Tesla is much more than just a car company—it’s a technology leader that has redefined modern mobility. With its pioneering work in autonomous driving, over-the-air updates, and battery innovation, Tesla’s growth over the past few years has been phenomenal. Tesla’s global sales have grown exponentially since 2013. Here are some of Tesla’s sales figures from the last five years:
- 2018: 191,627 vehicles sold.
- 2019: 192,250 vehicles sold.
- 2020: 217,600 vehicles sold.
- 2021: 302,000 vehicles sold.
- 2022: 1.33 million vehicles sold.
- 2023: 1.75 million vehicles sold.
Factors that contributed to Tesla’s sales growth:
- Demand: Increasing demand for electric vehicles
- Production: Expanded production capacity
- Popularity: Popularity of Tesla’s Model 3 and Model Y
Tesla sales trends
- Tesla’s sales surged significantly after 2020.
- Tesla’s sales have grown exponentially since 2013, from 22,477 units to 1.75 million in 2023.
- Tesla sales in the U.S. have also been declining, falling 1% in 2024 compared to the prior year. The automaker’s first annual sales decline in 12 years despite global EV sales rising 7.3%.
2.2. Estimated Pricing in India (Including 28% GST)
With the new 15% tariff and an assumed exchange rate of 1 USD = 86 INR, the base prices (converted to INR) are recalculated, and then 28% GST is added to arrive at the final estimated on-road prices.
Tesla Model Y
- U.S. Base Price: ~$42,000
- Converted Base Price: 42,000 × 86 = ₹36,12,000
- Tariff (15%): ₹36,12,000× 0.15 = ₹5,41,800
- Subtotal: ₹36,12,000 + ₹5,41,800 = ₹41,53,800
- GST (28%): ₹41,53,800 × 0.28 ≈ ₹11,63,064
- Estimated On-Road Price: ₹53,16,864
Technical Specifications:
- Range: ~480 km (WLTP)
- Battery Capacity: ~75 kWh
- Battery Type: Lithium-ion (NCA)
Tesla Model S Long Range
- U.S. Base Price: ~$85,000
- Converted Base Price: 85,000 × 86 = ₹73,10,000
- Tariff (15%): ₹73,10,000 × 0.15 = ₹10,96,500
- Subtotal: ₹73,10,000 + ₹10,96,500 = ₹84,06,500
- GST (28%): ₹84,06,500 × 0.28 ≈ ₹23,53,800
- Estimated On-Road Price: ₹1,07,60,320
Technical Specifications:
- Range: ~650 km (WLTP)
- Battery Capacity: ~100 kWh
- Battery Type: Lithium-ion (NCA)
* These are estimated prices, actual prices may differ. The prices may also differ on account of market capturing strategy of the company.
3. Can BYD’s Affordability, Innovation, and Global Expansion will Further Expand the Disruption?
Photo Courtesy: wired.com
3.1. BYD’s Global Footprint and Track Record
Chinese EV manufacturer BYD has emerged as a formidable competitor in the global EV market, with rapid growth in both production and sales over the last five years. BYD’s global sales have grown consistently over the last five years, with the company selling more than 4 million vehicles in 2024.
Sales by year:
- 2018: 247,811 units sold.
- 2021: 721,328 units sold.
- 2022: 1.80 million units sold.
- 2023: 3.02 million units sold.
- 2024: 4.27 million units sold.
Key highlights
- BYD’s sales growth has been driven by competitive pricing, increased production capacity, and a larger international presence.
- BYD’s sales of plug-in electric vehicles have increased significantly since 2018.
- BYD is the leading manufacturer of electric vehicles in China.
- BYD Becomes 3rd Best Selling Auto Brand in World in 2025, ahead of Global majors like Honda, Ford and Hyundai.
3.2. Estimated Pricing in India (Including 28% GST)
BYD Atto 3
- China Base Price: ~$22,000
- Converted Base Price: 22,000 × 86 = ₹18,92,000
- Tariff (15%): ₹18,92,000 × 0.15 = ₹2,83,300
- Subtotal: ₹18,92,000 + ₹2,83,300 = ₹21,75,000
- GST (28%): ₹21,75,000 × 0.28 ≈ ₹6,09,224
- Estimated On-Road Price: ₹27,84,224
Technical Specifications:
- Range: ~400 km (approx.)
- Battery Capacity: ~50 kWh
- Battery Type: Lithium Iron Phosphate (LFP; BYD Blade Battery)
BYD Tang EV
- China Base Price: ~$28,000
- Converted Base Price: 28,000 × 86 = ₹24,08,000
- Tariff (15%): ₹24,08,000 × 0.15 = ₹3,61,200
- Subtotal: ₹24,08,000 + ₹3,61,200 = ₹27,69,200
- GST (28%): ₹27,69,200 × 0.28 ≈ ₹7,75,376
- Estimated On-Road Price: ₹35,44,576.
Technical Specifications:
- Range: ~500 km (approx.)
- Battery Capacity: ~80 kWh
- Battery Type: Lithium Iron Phosphate (LFP)
BYD Seal
- China Base Price: ~$32,000
- Converted Base Price: 32,000 × 86 = ₹27,52,000
- Tariff (15%): ₹27,52,000 × 0.15 = ₹4,12,800
- Subtotal: ₹27,52,000 + ₹4,12,800 = ₹31,64,800
- GST (28%): ₹31,64,800 × 0.28 ≈ ₹8,86,144
- Estimated On-Road Price: ₹40,50,944
Technical Specifications:
- Range: ~450 km (approx.)
- Battery Capacity: ~65 kWh
- Battery Type: Lithium Iron Phosphate (LFP)
* These are estimated prices, actual prices may differ. The prices may also differ on account of market capturing strategy of the company.
4. Details of Already Available Indian EVs
India’s EV market isn’t new to innovation. Domestic players have been making steady progress with models that combine reliability and affordability. Here are some of the key models already available in India on road price:
Tata Nexon EV
- Price: ~₹13.0 to 18.0 Lakhs
- Range: ~312 km (ARAI)
- Battery Capacity: 30.2 kWh
- Battery Type: Lithium-ion (NMC)
- Highlights: Compact design, strong service network, and proven reliability
Mahindra BE 6e
- Price: ~₹19.0 to 27.0 Lakhs
- Range: ~150 km
- Battery Capacity: 15 kWh
- Battery Type: Lithium-ion (NMC)
- Highlights: Ideal for light commercial and urban use
Photo Courtesy: mahindraelectricsuv.com
Mahindra XEV 9e
- Price: ~₹24.0 to 34.0 Lakhs
- Range: ~200 km
- Battery Capacity: 20 kWh
- Battery Type: Lithium-ion (NMC)
- Highlights: Versatile for urban deliveries and commercial applications
Hyundai Creta Electric (Assumed Variant)
- Price: ~₹18.0 to 25.0 Lakhs
- Range: ~400 km
- Battery Capacity: ~64 kWh
- Battery Type: Lithium-ion (NMC)
- Highlights: Combines the popular Creta design with modern EV technology
Hyundai Kona Electric
- Price: ~₹23,00,000 – ₹25,00,000
- Range: ~452 km
- Battery Capacity: Options of 39.2 kWh and 64 kWh
- Battery Type: Lithium-ion (NMC)
- Highlights: Premium features and robust performance
Hyundai IQNIQ 5
- Price: ~₹45,00,000
- Range: ~630 km
- Battery Capacity: ~72.6 kWh
- Battery Type: Lithium-ion (E-Global Module Platform)
- Highlights: Compact, smart connectivity, and modern styling
MG ZS EV
- Price: ~₹19,00,000 – ₹27,00,000
- Range: ~461 km
- Battery Capacity: 50.3 kWh
- Battery Type: Lithium-ion (Prismatic Cell Battery)
- Highlights: Contemporary design with connected features
Maruti Suzuki e Vitara
- Price: ~₹17,00,000- 23,00,000 (assumed)
- Range: ~500 km
- Battery Capacity: ~49-61 kWh
- Battery Type: Lithium-ion (NMC)
- Highlights: Expected to bring Maruti’s signature reliability to the EV market
* As WE can see all the brands above, are already competitively priced with reasonably good specifications, will fight hard with Tesla and BYD.
5. Disruption and Elevation: The Impact of the New Tariff Policy
5.1. Competitive Innovation and Market Dynamics
The dramatic reduction in tariffs is expected to spark increased competition:
- For International Entrants:
- Tesla’s Advanced Features: With sophisticated autonomous driving capabilities and frequent OTA updates, Tesla is set to redefine consumer expectations in the premium segment.
- BYD’s Value Proposition: With competitive pricing and robust battery technology (LFP), BYD offers an attractive balance of performance and affordability.
- For Domestic Manufacturers:
- The influx of high-tech, premium EVs will compel Indian OEMs to accelerate innovation, enhance after-sales services, and improve overall product quality.
5.2. Infrastructure and Policy Synergy
A broader EV adoption also requires:
- Upgraded Charging Infrastructure: Experts estimate that India will need to install over 10,000 public charging stations in the next five years to support the surge in EV numbers.
- Robust Service Networks: International brands will establish extensive service and maintenance centres, ensuring consumer confidence and vehicle longevity. It will also ensure robust economic activity along with job creation.
- Local Manufacturing Incentives: While lower tariffs benefit immediate consumer pricing, balanced policies are essential to foster local manufacturing and R&D.
6. The Road Ahead: Disruption or Elevation?
6.1. Short-Term Impact
In the short term, reduced tariffs will immediately alter the pricing landscape:
- Premium Segment Shake-Up: Tesla’s and BYD’s models, priced now competitively (with final prices in the Rs 40–55 lakhs range for several models), will attract early adopters and tech enthusiasts.
- Heightened Consumer Awareness: High-profile launches and extensive media coverage will educate the public on advanced EV technologies, accelerating adoption.
6.2. Long-Term Market Evolution
Over time, the following trends are anticipated:
- Ecosystem Development: As both international and domestic players invest in EV technologies, India could emerge as a hub for EV innovation in Asia.
- Technology Transfer: Collaborations and joint ventures will facilitate local skill development and advanced manufacturing practices resulting in job and growth opportunities also.
- Environmental and Economic Benefits: Increased EV adoption will help reduce carbon emissions and contribute to overall economic growth through job creation and foreign investments.
6.3. Balancing Innovation with Local Growth
While international players bring cutting-edge technology, it is crucial to nurture domestic growth:
- Joint Ventures and Collaborations: Partnerships between global giants and Indian OEMs can facilitate technology sharing while preserving local expertise.
- Focused R&D Investments: Encouraging innovation within India will ensure long-term competitiveness, even as foreign models push the envelope in terms of features and performance.
7. Conclusion
The reduction of import tariffs from 110% to 15%, coupled with the inclusion of a 28% GST in final pricing represents a strategic pivot by the Indian government. This move not only opens the market to international powerhouses like Tesla and BYD but also compels domestic manufacturers to elevate their game. With Tesla’s advanced features and BYD’s cost-effective, robust technology, the premium EV segment (Rs 20 to 50 lakhs) is set for a significant transformation.
At the same time, established Indian players like Tata and Mahindra are not standing still. With models like the Nexon EV, Tigor EV, BE 6e, and WEV 9e, they’re gearing up to meet the new wave of competition with robust, locally attuned solutions. In addition, other established players like Maruti Suzuki, Hyundai, MG, KIA etc. will also leave no stone unturned to retain their position in the Indian market.
In summary, the new policy is more than just a pricing adjustment—it is a catalyst for comprehensive change. It is expected to:
- Drive innovation: Forcing all players to adopt the latest technologies in battery management, autonomous driving, and connectivity.
- Expand consumer choice: Making premium EVs accessible to a larger audience through competitive pricing.
- Boost economic growth: Through increased FDI, local manufacturing opportunities, skill development and job creation in advanced automotive technologies.
As India accelerates toward its ambitious goal of having 30% of all vehicles electric by 2030, the collaborative evolution of technology, infrastructure, and market dynamics will be essential. With a balanced approach that encourages both international competition and domestic innovation, the future of India’s EV ecosystem looks brighter than ever.
Ultimately, this evolving landscape promises more choices for consumers, employment opportunities, a significant boost in innovation, and a cleaner environment as the nation shifts toward electric mobility. The coming years will be exciting as technology, market dynamics, and government policy converge to create a truly competitive and sustainable EV ecosystem in India.
