Tesla Resumes Search for Showroom Space in New Delhi, Signaling Renewed Interest in Indian Market

Elon Musk's Tesla has resumed its search for showroom space in New Delhi, signaling a potential rethink of its entry into the Indian market after initially halting investment plans earlier this year.

According to news agency Reuters, Tesla, which had paused its search in recent months, is now in early talks with India’s biggest property developer, DLF, to secure space in the capital region.

The discussions come after Musk's canceled trip to India in April, where he had been expected to announce a $2-3 billion investment. The visit was called off following Tesla's decision to lay off 10% of its staff due to falling sales.

Tesla is reportedly looking for a space of 3,000 to 5,000 square feet for a consumer experience center and a much larger space for delivery and service operations.

While Tesla's search is still in the exploratory phase, the company is considering locations such as DLF’s Avenue Mall in southern Delhi and the Cyber Hub in Gurugram.

Tesla’s potential showroom would be around 8,000 square feet in the Avenue Mall, where other foreign retailers like Uniqlo and Marks and Spencer have outlets.

Tesla is also weighing options around the Indian government’s tax policies for electric vehicles (EVs), which could affect its decision to import cars at a 100% tax rate or benefit from a lower 15% tax rate if it commits to local investments.

The government is eager to attract automakers like Hyundai and Toyota and is making efforts to relax provisions of its policy to stimulate the EV market, which currently represents about 2% of total car sales in India.

Meanwhile, Musk’s Starlink is also considering entering India, following a successful lobbying effort to secure spectrum allocation against competition from billionaire Mukesh Ambani's ventures.