Tesla applies for homologation of Model 3 and Model Y in India

Elon Musk’s Tesla Motors, which recently opened its first showroom in Mumbai, is reported to have now applied for homologation of two cars – Model Y and Model 3 – tht are planned to be first introduced in India.

Homologation is the process of certifying a vehicle for roadworthiness so as to ensure that it meets all the norms necessary for vehicles, manufactured or imported, before commercial launch of a new vehicle in India. It applies to all vehicles - manufactured in India, assembled in India or imported as CBU.

The homologation is carried out by the Automotive Research Association of India (ARAI) through a variety of tests to ensure vehicle quality, safety norms, performance, emissions and regulatory requirements. After passing all the tests, a vehicle is issued a Type Approval Certificate (TAC) to certify that it is roadworthy and meets all the mandated standards.

Tesla set up a subsidiary, Tesla India Motors and Energy Pvt Ltd in 2021, with plans to enter the Indian market, but had to hold back because of high competition, the high level of tariffs in India for imported vehicles, and the high prices of its vehicles. It has now been emboldened by the Trump administration’s demand that countries trading with the US must lower tariffs.

Reports say Tesla has been testing some of its models like the Model Y and Model 3 on Indian roads ahead of applying for homologation.

Reports also said that Tesla will not be manufacturing cars in India and instead, would import CBUs to be assembled in the country. That would help the company understand the market before starting local production.

Tesla, which currently manufactures cars in the United States, China and Germany, is expected to use its Chinese base to import CBUs into India as it would be cheaper. 

Tesla will also benefit from the reduced import duty for electric vehicles in India, which now stands at 15 per cent, against 70 to 100 per cent earlier.

Elon Musk, with his proximity to President Trump, is pushing for even lower tariffs, according to reports.

The lower import duties, however, will be applicable only for OEMs that commit to Make In India within 3 years and also invest at least $500 million (Rs4,340 crore) in the country. 

India has also fixed a 5-year licence validity for manufacturers of motor vehicles under the Central Motor Vehicles Rules (CMVR) for licensing and certification, including factory licences, and BIS/AIS standards for vehicle safety and design.