Tesla moves closer to India entry, refunds 2016 Model 3 pre-orders

Tesla has begun refunding Model 3 reservation fees to Indian customers, signaling a potential upcoming launch in the market.

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Tesla Inc. has started refunding reservation fees made by Indian customers in 2016 for its Model 3 electric sedan, according to emails reviewed by Bloomberg News. Many people believe that this action, which was caused by the model's worldwide termination, was a prelude to Tesla's official debut into the Indian market, which is home to the third-largest vehicle industry in the world.

The emails states, “We would like to return your reservation fee for the time being… When we finalise our offerings in India, we will reach out in the market again. We hope to see you back with us once we are ready to launch and deliver in your country.”

The refund is being issued to customers who had pre-booked the Model 3 back in April 2016 by paying a reservation fee of $1,000, which was approximately Rs 66,237 at the time. Back then, Tesla had not shared any specific timeline for the launch or pricing details of the model in India.

In the email, the company further explained, "The original Model 3 in your reservation was one of the products that have been replaced." Customers were requested to share their bank details in order to process the refund. This suggests a revamp in Tesla's India product strategy, possibly aligning with newer models or updated versions of its EV lineup.

Elon Musk to visit India soon

Elon Musk, the CEO of Tesla, hinted to last-minute preparations for the introduction of sales when he announced that he would be visiting India later this year, coinciding with the company's cancellation of its prior reservations. Tesla's debut may be made easier by ongoing trade talks between India and the US, which may involve a potential drop in import taxes on electric vehicles.

Due to high import duties that may make its cars unaffordable, Tesla has postponed its India debut for years. However, Tesla is ready to take action now that India is exploring more favorable trade conditions, particularly as it seeks to electrify transportation and lower emissions.

The growth has also been pushed by the company's performance worldwide. Due to fierce competition from China's BYD Co., Tesla had its first annual delivery fall in more than ten years last year. India presents a fresh opportunity for expansion, particularly in light of the growing demand for luxury EVs among the upper middle class.

When is Tesla expected to be in India?

Tesla's arrival, however, would upend India's domestic EV market, which might have an impact on domestic manufacturers like Tata Motors and Mahindra Electric, two major employers in the region's manufacturing industry.

Industry sources estimate that Tesla's deployment may start within 12 to 18 months, but no official timeframe has been announced. If import duties are lowered, the newer-generation Model 3 or a locally produced variation would probably be the first to be introduced.