Latest / Elon Musk Podcast / Tesla Launches Model Y in India at $66K

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Tesla Launches Model Y in India at $66K · Elon Musk Podcast

• 0:01
  Hey everybody, welcome back to the Elon Musk Podcast.
• 0:05
  This is a show where we discuss the critical crossroads that
• 0:08
  shape SpaceX, Tesla X, The Boring Company, and Neurolink.
• 0:13
  I'm your host, Will Walden. Tesla has officially launched
• 0:19
  its Model Y in India, setting a starting price of about ₹5.5
• 0:24
  million. That's about $66,000 USD and
• 0:29
  raises this really interesting question though.
• 0:32
  Who in India is going to buy a Tesla for that price now?
• 0:37
  The company opened pre-orders for the vehicle this week
• 0:40
  following the Prime Minister Modi's March approval of a
• 0:44
  policy that reduces import taxes on EVs for global automakers
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  willing to invest at least $500 million in local manufacturing
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  and start building cars in India within three years.
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  Now, Tesla is the first major company to take advantage of the
• 0:58
  new policy and has moved quickly by announcing a launch for its
• 1:02
  most popular global model. However, India it might not be
• 1:09
  rated for this. The prices could create a major
• 1:12
  barrier for people. Now the cost places the Model Y
• 1:16
  in the same segment as high end luxury brands like
• 1:18
  Mercedes-Benz, Audi, BMW without matching the badge value or
• 1:22
  luxury appeal those brands carry.
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  In India's premium car market. It's different.
• 1:28
  In India, Mercedes-Benz, Audi and BMW really big deal.
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  Tesla. Not as much right now.
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  Not as rushed, not as not as much.
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  But Tesla plans to sell the India bound Model Y through
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  direct imports for now, with units shipped from its factory
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  in Berlin. That keeps the price far above
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  what Indian consumers typically spend on a car.
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  Now the average vehicle in India sells for about $13,000, even
• 1:55
  among EVs where pricing is usually higher.
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  Tesla's $66,000 entry point is more than triple the cost of the
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  top selling EV in the country. The Tata Nexon EV priced around
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  $20,000. Even MG and BYD, both foreign
• 2:11
  brands, offer electric SUVs for $30,000 or under.
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  How is Tesla going to compete with that?
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  This twice plus the cost of another EVABYD.
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  Mind you, BYD competes directly with Tesla with technology and
• 2:31
  MG same thing, very similar. Now.
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  Despite these prices though Tesla's interest in India, it's
• 2:38
  been long-awaited towards the company establishing a physical
• 2:42
  presence in the world's third largest car market.
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  That's the had previously spent years installed negotiations
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  over import taxes and infrastructure policy before
• 2:52
  reaching an agreement with Modi in earlier of 2024.
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  As part of the deal, Tesla will build a manufacturing plant in
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  India and construction is expected to begin in around
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  2026. And until then, Tesla will rely
• 3:06
  on its Berlin factory to supply the Indian market with a limited
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  number of vehicles, using the interim period to test demand
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  and brand acceptance. Now, Tesla's Model Y pricing
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  strategy in India mirrors its approach in smaller luxury
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  oriented markets where sales volumes are low but brand
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  visibility is very important. However, the Indian car market
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  is extremely price sensitive even in the luxury segment.
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  With Mercedes and BMW, they sell small numbers of high end
• 3:36
  vehicles annually. Tesla is a relatively unknown
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  quantity in India outside of tech savvy consumers and EV
• 3:43
  enthusiasts. They kind of have to start all
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  over when they go over to India. Company will have to convince
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  those buyers to pay more for a brand that doesn't yet have
• 3:51
  widespread service centers. There's barely any charging
• 3:55
  infrastructure or customer support operations in that
• 3:58
  country, and the company has not disclosed expected sales volumes
• 4:02
  for India. But sources say the Tesla's
• 4:05
  planning for expectations are very conservatives, with fewer
• 4:11
  than 1000 units to be targeted for India in the first year.
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  Now, Tesla's priority in this phase is to gauge consumer
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  response to the vehicle and test its logistics and service
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  capabilities. Companies also recruiting for
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  sales, service and charging teams across by Delhi and the
• 4:32
  whole nation. So several Indian automakers
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  have also criticized the government's decision to give
• 4:38
  tax breaks to Tesla, an outside company, from an outside foreign
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  soil. Executives at Tata Motors and
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  Mahindra have publicly said that any policy favoring imports
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  undermines local EV innovation. However, the government sees
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  Tesla's presence as a way to bring global attention and
• 4:57
  technology transfer to India's EV ecosystem.
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  Officials involved in the policy decision said the long term goal
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  is to attract not only Tesla and Elon Musk but other
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  international EV players like Rivian, Polestar and Lucid to
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  establish factories and also R&D centers in India.
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  It's going to be a win for India if all of these companies get in
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  there. There's going to be a major tax
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  breaks for these companies, but also eventually the state and
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  Government of India will be making money from these.
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  Sales to Tesla's first batch of Model Y units for India will
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  include both rear wheel drive and dual motor all-wheel drive
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  variance. And get this, the top end
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  version is $78,000 USD. Now that's the price which
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  includes the reduced import duty offered under the new policy,
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  which Tesla received by committing to invest at least
• 5:57
  $500 million in to begin production within three years.
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  Even with the reduced tariff though dropping from over 100%
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  to 15%, the price remains far above what most Indian consumers
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  can afford or justify justify to pay.
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  The car will initially be sold only online, with deliveries
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  expected to begin in earlier 2026.
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  Tesla's following its global strategy of direct to consumer
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  sales without third party dealerships.
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  This model has proven difficult in India in the past, where
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  consumers are more accustomed to interacting with dealership
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  networks and value on site after sales service.
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  Tesla's digital first approach may further limit its appeal
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  unless it can build a service infrastructure quickly enough to
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  reassure buyers that if something happens to their
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  vehicle, Tesla will be there for them.
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  Now they don't really have much of A charging infrastructure for
• 6:53
  Tesla vehicles over there. It's a major bottleneck for
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  them. But Tesla has announced plans to
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  deploy its Supercharger network across 3 metro areas initially,
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  but expansion will depend on partnership with energy firms in
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  India and also the Public Utilities there.
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  Most Indian cities still lack widespread EV charging stations
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  and long distance travel remains impractical for EVs without
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  dependable public or semi public charging grid.
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  Thus is in early stage discussions with Reliance and
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  Tata Power to Co develop high speed chargers along highways.
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  But there's no agreements that have been finalized as of yet.
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  Now Indian financial institutions are also unsure how
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  to structure loans or leases for a product has no historical
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  resale value in the country. Now, used Teslas currently don't
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  exist in India and banks will need time to develop valuation
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  models. This adds another layer of
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  friction to purchases like what do you do with your Tesla after
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  five years? What's the price?
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  What are you going to get for it?
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  How can you trade it in? There's no structure for that
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  yet. It's brand new over there.
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  You know there's friction for those purchases since even
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  wealthy buyers often rely on financing for high value car
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  purchases to take advantage of tax benefits or investment
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  flexibility. Now Tesla.
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  The launch in India comes at a time when the government is
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  pushing hard to electrify transportation and also reduce
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  oil imports. India imports over 85% of its
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  crude oil and electric mobility is a central part of its energy
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  policy. However, electrification in
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  India has centered on two and three Wheelers which make up
• 8:36
  about 80% of vehicle sales. Government has supported public
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  bus electrification and last mile delivery EVs but private
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  car electrification is still Mason with under 3% of new car
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  sales being electric now. This is India's strategy begins
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  with a branding play rather than a volume play.
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  They're going to have about 1000 models go out.
• 9:00
  Company is not entering with an expectation to compete on price
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  or dominating sales. Instead, we use this launch to
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  establish a foothold, sneak in, build operational muscle and
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  prepare for a more competitive phase once local production
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  starts. And also when you get an
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  infrastructure and they have charging stations and they have
• 9:19
  service stations and they have the people on the ground to help
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  out. Now, the real test though, of
• 9:24
  Tesla's India ambitions will come after its factory begins
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  production in 2027, allowing the company to sell cars without
• 9:32
  import duties. And it prices closer to Indian
• 9:35
  EVs, but nowhere near the normal cost of a car there, which is
• 9:41
  under $20,000, and other EVs, which are usually around $30,000
• 9:47
  USD. It's official though, Tesla is
• 9:50
  heading to India. Hey, thank you so much for
• 9:53
  listening today. I really do appreciate your
• 9:55
  support. If you could take a second and
• 9:57
  hit the subscribe or the follow button on whatever podcast
• 10:00
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• 10:03
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• 10:04
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• 10:07
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• 10:13
  support the show even more, go to patreon.com/stagezero and
• 10:20
  please take care of yourselves and each other and I'll see you
• 10:22
  tomorrow.