Tesla Calls India "Very Hard Market" During Q1 Earnings Call

Elon Musk’s electric vehicle giant Tesla said its cars would be nearly 100% more expensive under the current tariff structure if it started selling in India today. Addressing the company’s expected entry into the Indian market, Tesla’s Chief Financial Officer (CFO) Vaibhav Taneja said that the company has been actively working on entering India, but described it as "a very hard market."

"And especially under the current tariff structure in India, any car we send in is subject to a 70% import duty, plus a 30% luxury tax. So the same car becomes 100% more expensive than what we sell it for elsewhere," Taneja said during the Q1 earnings call.

Taneja added that Indian customers feel they are overpaying, adding that the additional cost goes to the government, not the company.

"That’s why we’ve been very careful in figuring out the right time. India has a big middle class that we’d love to tap into — it would be a great market. But current policies create friction we’re still trying to work around," he explained.

What Has Tesla Done So Far?

These comments follow recent reports that Tesla is scouting showroom spaces in Delhi and Mumbai, each expected to be around 5,000 square feet. Earlier reports indicated that Tesla is in discussions with DLF to lease space in Avenue Mall, a well-known retail location in Delhi. The company may import fully assembled vehicles from its Berlin factory to test market demand before considering local assembly or manufacturing.

Just days before the earnings call, Elon Musk spoke with Indian Prime Minister Narendra Modi to discuss "technology and innovation cooperation."

Tesla’s India entry has been long anticipated, especially after the Indian government conditionally relaxed high import duties on EVs. Under the new policy, the import duty on EVs priced above $35,000 will be reduced from 110% to just 15% if the foreign company commits to investing in local manufacturing.

Tesla's Profits Plunge 71%

Tesla reported a 71% drop in net profit for the quarter ending March 31. Automotive gross margin (excluding regulatory credits) fell to 12.5%, down from 13.6% in the previous quarter. This still beat analyst expectations of 11.8%, according to a Visible Alpha poll of 21 analysts.

The EV maker posted $19.34 billion in revenue for the January–March quarter. Earlier this month, Tesla revealed that vehicle deliveries fell 13% year-on-year during the same period.

During the call, CEO Elon Musk stated he would now spend more time at Tesla, saying his work at the Trump Administration’s DOGE department is partly done and that he would devote one to two days a week to the company starting in May.

"Absent the macro issues, we don't see any reduction in demand," Musk said. However, he warned that tariffs would significantly affect Tesla’s energy business.

Musk once again told investors that Tesla’s future lies in large-scale autonomous vehicles and humanoid robots.