Elon Musk’s Tesla Inc. has taken the initial steps toward selling cars in India by initiating the certification and homologation process for two of its electric vehicle models: the Model Y and Model 3. This is a crucial requirement before any vehicle can be sold in the country.
Tesla India Motor & Energy Pvt. Ltd., the local subsidiary of the company, has submitted applications for these two models, according to industry sources. Homologation ensures a vehicle’s roadworthiness, confirming it meets the emission and safety standards mandated by the Central Motor Vehicle Rules.
Previously, Tesla had submitted seven applications for homologation, intended for test cars. An eighth application was recently approved. This move aligns with ongoing discussions between the United States and India regarding a free trade agreement, which could lead to reduced tariffs and increased bilateral trade.
Musk is eager to tap into the Indian market, the world’s third-largest car market. He views it as a potential alternative to China. While the Indian government is keen on Tesla establishing a local manufacturing plant, Musk initially aims to export vehicles to India without immediate manufacturing plans.
India’s electric car market saw a notable 20% increase in sales during 2024, reaching 99,165 units, up from 82,688 units in 2023. Tata Motors and JSW MG Motors currently lead the market. The luxury electric vehicle segment also experienced growth, with 2,809 EVs sold by brands such as BMW, Mercedes Benz India, Volvo Cars India, Audi, and Porsche in 2024, compared to 2,633 in 2023. Furthermore, the Federation of Automobile Dealers Associations (FADA) reports nearly a 20% growth in electric passenger vehicle retail sales.
The industry anticipates continued growth in the EV market, with forecasts projecting a compound annual growth rate (CAGR) of 43%. Government initiatives and subsidies, such as the PM E-Drive scheme, are also contributing to this growth, with India shifting towards green energy to combat climate change. The electric two-wheeler sector also saw significant growth, with sales reaching 1.13 million units in 2024, up from 860,000 units in 2023. The overall EV penetration in the country increased to 7.46% in 2024, up from 6.39% in 2023.
