Hello, I am Priyanka Salve, CNBC’s senior correspondent for India, writing from Singapore. This week, I look at how global and local electric car makers are betting on the world’s third-largest car market in hopes of capturing the attention — and wallet share — of the Indian middle class.
A Tesla Model Y is on display inside the company’s first showroom at the Bandra-Kurla Complex in Mumbai, India, on July 15, 2025.
Nurphoto | Nurphoto | Getty Images
This report is from this week’s edition of CNBC’s “Inside India” newsletter which brings you news and market commentary on the emerging powerhouse. You can subscribe here.
The big story
For years now, India’s auto market has been a cozy little clique of Japanese, Korean and Indian companies, with the top six carmakers holding more than 90% of the market, catering to local consumers’ mostly utilitarian preferences.
The entry of electric vehicles, however, could shake things up — disrupt the industry and ruffle the pecking order.
Global electric vehicle giants are making moves in India, driving old market players to learn new tricks, and the Indian middle class is left wondering: could my next SUV be electric?
Take Tesla, Elon Musk’s car company last week delivered its first electric SUV, Model Y, from its showroom in Mumbai. But priced at a whopping 6 million Indian rupees ($68,094) it is firmly positioned as a “dream” car for most of the country’s middle class.
As dreams are often tricky to realize, it was not surprising that Tesla reportedly received just 600 orders since it opened up shop in July.
Global EV market disruptor, China’s BYD, crossed 10,000 deliveries in India earlier this month, having started selling cars in the country in 2022. All four of BYD’s EV models for sale in the country hover toward the higher end of 3-million-rupee price point or beyond.
India’s top-selling mid-sized conventional SUV, Hyundai Creta, comes at starting price of 1.1 million Indian rupees and goes up to 2.1 million. It sold 186,919 units in 2024 alone.
Foreign carmakers need to set up local manufacturing to build scale and launch their affordable range of cars as duties on imported cars can go up to 110%, plus there’s an annual import cap of 2,500 units per company.
While scalability remains a challenge for Tesla and BYD as both import vehicles, it’s a different story for Vietnam’s VinFast.
VinFast on Saturday rolled out its VF6 and VF7 models priced between 1.7 million rupees and about 2.3 million rupees, with those cars being assembled in the southern Indian state of Tamil Nadu.
Auto analysts say that from a pricing perspective this hits the sweet spot for consumers as many popular internal combustion engine mid-sized SUVs fall in that price band, including Hyundai’s Creta.
Shailesh Chandra, Managing Director, Tata Motors during launch of the new Nexon in JW Marriott hotel at Aerocity on September 14, 2023 in Gurugram, India.
Parveen Kumar | Hindustan Times | Getty Images
Still, Indian car companies have the cheapest EV offerings, starting at as low as 1 million rupees. “Currently Tata Motors is the largest EV player in the country with around 40% market share, followed by JSW MG Motor at 30% and Mahindra & Mahindra at 21%-22% share,” according to Macquarie Capital.
The key to keeping prices low is local production, and foreign players are recognizing that. VinFast’s local manufacturing ability, for instance, is what allows it to make cars at scale and price them attractively compared with other overseas players.
“By optimizing production, making smart design choices, and prioritizing the features that matter most for everyday driving, we’re able to keep prices closer to what customers truly want,” Pham Sanh Chau, CEO, VinFast Asia, told CNBC.
BYD had similar plans, but it ran into roadblocks after India’s Commerce and Industry Minister Piyush Goyal earlier this year rejected the company’s offer to invest.
On Wednesday, Bloomberg reported that BYD’s senior management will visit India seeking to expand operations in the country. The company plans to launch its Atto 2 model in the country, priced at under 2 million rupees, the report said.
“BYD has been a disruptor in every market it has entered globally, and India does not want that to happen to its EV market,” an auto analyst at a domestic brokerage said, requesting anonymity due to the sensitive nature of the topic.
Tesla, meanwhile, was being courted by the Indian government ever since Musk announced his plans to enter the electric car market. But reports in June quoting an Indian official said the company was “not interested” in producing cars in India.
Given tensions between the U.S and India, and changing, albeit strained relations between New Delhi with Beijing, securing investment from Tesla or approving those from BYD look unlikely in the near term.
Meanwhile, the country’s old guard is preparing to launch more EV products.
Offerings and challenges
Mahindra & Mahindra, Tata Motors, Maruti Suzuki and Hyundai have plans to launch more EV models, with Jain saying that the newer products will support EV adoption across a wider segment of consumers.
EVs are still a tiny slice of India’s car market, with a penetration of just 5.3% as of August 2025, according to data from the Federation of Automobile Dealers Associations.
Compare that to the share of China’s battery electric vehicles at 27% of the auto market, and both the potential and the challenges of India’s market become starkly visible.
For real growth to happen, one critical piece needs to fall into place: the public charging infrastructure.
Consumers currently face “range anxiety” while buying EVs due to fewer public charging points.
“The fuel stations are almost four times of the charging stations that we have for the electric vehicles,” said Saket Mehra, partner, and auto and EV industry leader at Grant Thornton Bharat.
Lack of adequate infrastructure restricts EVs to high-net-worth consumers because they have greater accessibility to private charging facilities. “They can put a charging infrastructure at their houses, because most of the HNIs and ultra HNI live in individual houses rather than apartments,” said Mehra.
Nevertheless, while public charging infrastructure is not adequate, it is improving. According to Indian government’s public policy think tank, Niti Aayog, there 14 cars per charging station, compared to nine cars per charging station in China.
According to report by Indian data provider CareEdge, public EV charging stations have risen from 5,151 in 2022 to 26,367 in mid-2024.
The buzz around the EV industry with new challengers entering the market could usher in a new chapter in India’s auto history.
In the late-90s, when Hyundai entered India, Maruti Suzuki was the undisputed carmaker. Few believed that a locally unknown player could pose a serious challenge. But after Hyundai launched Santro — a quirky looking hatchback, priced right in the comfort zone of middle-class India — there was no looking back. Today it is the second biggest car company in India.
Which carmaker can be the next Hyundai for EVs in India? We are tracking the market closely and will keep you updated.
Top TV picks on CNBC
Trump on Sept. 9 wrote on Truth Social that “India, and the United States of America, are continuing negotiations.” Catch CNBC’s Megan Cassella on the latest trade discussions between the U.S. and India.
Kiranjeet Kaur, associate research director at IDC Asia Pacific, explained that U.S. tariffs accelerated Apple’s decision to shift production to India from China to avoid increased costs.
Alok Saigal, president and head of Nuvama Private, explained that Singapore and Dubai are extremely friendly to family offices and provide gateways to other regions.
Need to know
U.S. President Donald Trump asked the European Union to impose 100% tariffs on India and China. Trump made that request, which is aimed at pressurizing Russia to end its war in Ukraine, in a meeting with senior U.S. and EU officials, two sources confirmed to CNBC’s Megan Cassella. India is one of the biggest buyers of Russian oil.
India urged BRICS members to tackle their trade imbalances with the country. At a virtual summit on Monday, India’s External Affairs Minister S. Jaishankar said the country’s “biggest trade deficits are with BRICS partners.” The bloc’s key members are Brazil, Russia, India, China and South Africa.
Air India said it is strengthening its emphasis on safety. CEO Campbell Wilson said Tuesday that Air India was “fully embracing a new normal of even extra focus on safety.” The carrier experienced a tragic crash in June, in which all but one of the 242 people on board were killed.
– Yeo Boon Ping
Quote of the week
In all the 30 years I dealt with trade, there has always been an impact on trade from geopolitics and domestic politics, but I have never seen geopolitics and domestic politics drive trade talks like this.
— Mohan Kumar, former Indian ambassador to France and Bahrain
In the markets
Indian stocks were trading flat, with the Nifty 50 hovering close to the 25,000 mark it briefly breached Wednesday. The index has risen just a little over 3% this year. The 30-stock BSE Sensex was also little changed as of 11:30 a.m. India time.
The benchmark 10-year Indian government bond yield was trading flat at 6.489%.
Coming up
Sept. 12: India consumer price index for August
Sept. 15: India wholesale price index and unemployment rate for August
Sept. 17: Startup incubator Dev Accelerator, medical device manufacturer Galaxy Medicare, jewelry firm Shringar House of Mangalsutra and home services provider Urban Company launch IPOs
SHOWTIMES:
U.S.: Sunday-Thursday, 23:00-0000 ET
Asia: Monday-Friday, 11:00-12:00 SIN/HK, 08:30-09:30 India
Europe: Monday-Friday, 0500-06:00 CET
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