Elon Musk's Tesla Inc. has made a major leap towards entering India by starting the certification and homologation procedure for two of its electric vehicles. This is a major prerequisite for any car before it is sold legally in the country.
Tesla India Motor & Energy Pvt. Ltd., the Indian subsidiary of the company, has made two new applications for the homologation of its Model Y and Model 3 vehicles in India, sources in the industry have said.
Homologation is a compulsory certification process that assures a vehicle meets India's safety, emissions, and road-worthiness standards under the Central Motor Vehicle Rules. Homologation is applicable to both locally produced and imported vehicles.
Earlier, Tesla had made seven homologation applications in India, mainly for test cars. Recently, an eighth application was approved, indicating a boost to the efforts of the company.
This move comes in tandem with negotiations between India and the U.S. for a free trade agreement, which may pave the way for lower tariffs and increased trade between the two countries.
Musk has been interested for a long time in making Tesla's presence in India, especially as a fallback to China as U.S. sanctions against China increase. Though the Indian government is urging Tesla to construct a factory locally, Musk's immediate interest seems to be in selling Tesla cars in India instead of establishing local manufacturing.
India's electric vehicle industry is experiencing strong growth. Electric car sales in 2024 increased by 20% to 99,165 units from 82,688 units in 2023. Market leaders are Tata Motors and JSW MG Motors.
The luxury EV market also recorded a growth trend, with BMW, Mercedes-Benz India, Volvo Cars India, Audi, and Porsche selling a total of 2,809 electric vehicles in 2024, an increase from 2,633 in the previous year.
As per the Federation of Automobile Dealers Associations (FADA), Indian electric passenger vehicle retail sales grew by almost 20%, and industry analysts foresee sustained growth, with a forecast compound annual growth rate (CAGR) of 43%.
Government initiatives, such as incentives under the PM E-Drive program, are helping drive India towards electric mobility and sustainability.
The electric two-wheeler segment also saw impressive growth, with 1.13 million units sold in 2024 compared to 860,000 in 2023.
Overall, EV penetration in India increased to 7.46% in 2024 from 6.39% in the previous year, indicating the nation's focus on clean energy and lowering its carbon footprint.
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