Just when Tesla seemed ready to finally make its long-awaited entry into India, its India head Prashanth Menon has stepped down. The timing is far from ideal — Tesla is currently preparing to open its first retail outlets in major cities like Mumbai and Delhi and begin deliveries by the third quarter.
Bloomberg, which broke the story, says Menon’s resignation was for personal reasons. Tesla has not officially commented. Menon had been with Tesla for nearly nine years, and for the past four of those, he was leading the company’s India strategy — from setting up a local office in Pune in 2021 to locking in real estate for showrooms this year.
With Menon out, Tesla’s operations in India will reportedly be handled by its Chinese team. This might raise a few eyebrows in India, especially given the political sensitivities and Tesla’s push into what is the world’s third-largest car market. No Indian replacement has been announced yet.
That also means more decisions about the India play will likely flow directly from Elon Musk and his core global leadership team — not surprising, considering Tesla has been centralising control of its international markets lately.
Tesla’s India entry has been anything but smooth. One of the biggest sticking points has been India’s steep import taxes — which can go up to 110% on fully built foreign cars. Tesla has long pushed for reduced tariffs so that it could test the waters with imports before committing to setting up a local factory.
A breakthrough might be in sight. India is currently negotiating a bilateral trade agreement with the US, which could mirror some parts of the UK-India Free Trade Agreement announced on May 6. Under that deal, India agreed to reduce car import duties to just 10% under a special quota system. If a similar clause finds its way into the India-US deal, Tesla and other EV makers could benefit.
There’s also talk that the quota for importing electric vehicles at concessional rates could go up — from the current 8,000 units to as many as 50,000. That would give Tesla more room to scale up its sales here without the initial pain of setting up local manufacturing.
Tesla hasn’t confirmed whether the cars coming to India will be from its factories in China, Germany, or the US. However, with the China team now leading the local operations, it wouldn’t be surprising if China plays a key role in the early shipments.
For now, Tesla's India plans are still import-only. But there have been hints that a local manufacturing facility could be on the cards later — especially if the Indian government remains firm on its ‘Make in India’ stance.
Tesla’s India move also comes at a time when the company is feeling the heat globally. Sales are falling — in April, they dropped 62% in the UK and 59% in France. Even in the US, Tesla is struggling to keep pace with rivals, especially China’s BYD, which may overtake Tesla as the world’s biggest EV maker this year.
There’s also the Elon Musk factor. His controversial political views have not gone down well in many parts of the world, with protests and negative headlines following him around. Still, not all of Tesla’s troubles are political — stronger competition and slowing demand have also hit the brakes.
Despite all this, Tesla appears to be pushing ahead in India. The company has recently posted job openings for showroom staff and order management roles — a sign that launch preparations are active.
Sales are expected to begin in Mumbai, Delhi and Bangalore sometime in the third quarter. If things go as planned — and that’s still a big if — Tesla could ship several thousand cars to India by the end of the year.
