Tesla’s most affordable EV Model 2 could launch soon in India. What it offers

Tesla Model 2 in India gradually nearing reality

Amid speculations of Tesla’s India launch, a report has claimed that the electric carmaker is likely to introduce an affordable electric car for the market. Back in November 2023, HT Auto reported that the most affordable Tesla electric car will be built in the company’s Berlin GigaFactory. However, since then, the situations have evolved a lot.

The Indian government has amended its EV policy to attract investments in March 2024. In the Union Budget 2025 as well, the Indian government tried to create an environment that would attract Tesla. The Indian government recently reduced EV import duties from 110 per cent to 70 per cent to attract foreign carmakers.

Also Read : Upcoming cars in India

At the same time, the US-based electric carmaker has restarted showing interest in setting up shop in India. Now, it has been reported that the Tesla Model 2, which is likely to be the name of the most affordable electric car from the brand, possibly to be priced at around $25,000, translating into ₹21 lakh, will be launched in India. The EV manufacturer is reportedly planning to start selling its electric cars in India in the first half of this year.

Tesla’s $25,000 EV project to be rejuvenated

While some reports suggested that Tesla could start India operations with electric cars like the Model 3 and Model Y, questions also arise about whether the EV maker will revive its affordable electric car project. The Model 3, which is currently Tesla’s entry-level EV, is priced around ₹36 lakh in Germany. In India, it will cost much higher after adding import taxes.

Tesla has been eyeing the Indian market for several years but previously cited high import duties as a major roadblock. Following that, In 2024, the Indian government amended its EV policy. According to the amendment, if an automaker sets up a local manufacturing plant in the country with a minimum investment of $500 million, the company will be eligible for a 15 per cent customs duty for five years. If Tesla follows this rule, then it could be beneficial for the automaker to bring its existing models like the Model 3, Model Y, Model X, Model S and Cybertruck to India with a 15 per cent customs duty applicable.

Additionally, India’s electric vehicle market is witnessing rapid growth, with an annual expansion of around 20 per cent. While it remains smaller than China’s market, it presents a significant opportunity for Tesla, especially as the company faces slowing sales in the US.

India and the US are aiming to ramp up bilateral business, targeting to double the commerce to $500 billion by 2030. With both countries planning to enhance trade by increasing exports of industrial goods, Tesla’s India entry seems a viable move.

Tesla Model 2 is a reworked Model Y?

Before it was put on the back burner, the much anticipated most affordable Tesla EV was known tentatively as the Model 2 or Project Redwood. The much-hyped Tesla Model 2 is nothing but a toned-down iteration of Tesla Model Y. Tesla CEO Musk confirmed at several quarterly investor calls that a new, cheaper vehicle, is still on track for a 2025 release.

Elon Musk said that it would simply be a smaller, to be certain version of the Model Y. In that case, expect it to be a compact electric SUV dimensionally bigger than the Cybercab. It could come with a bigger battery pack promising better range than Cybercab. It would get power from battery packs ranging from 54 kWh and offer a running range of around 400 kilometres on a full charge.

Upon launch, the Tesla Model 2 will challenge some of the most competent electric cars in India, which would include the Mahindra XEV 9e, Mahindra BE 6, BYD Atto 3, Tata Curvv EV, Hyundai Creta Electric, MG ZS EV among others.

Check out Upcoming EV Cars in India, Upcoming EV Bikes in India.

First Published Date: 20 Feb 2025, 15:27 PM IST