The lease agreement has set a new national benchmark, with Tesla set to pay INR 3.87 Cr for the first year for a 4,003 sq ft space
With this, the Elon Musk-led company will take over the space on the ground floor of 2 North Avenue at the plush business district
Meanwhile, US officials are nudging their Indian counterparts for zero tariffs on car imports under a proposed trade deal between the two nations
Taking another step towards its India entry, electric vehicle (EV) maker Tesla has reportedly signed a lease agreement to open its first showroom in the country in Mumbai’s Bandra Kurla Complex (BKC).
As per documents accessed by Economic Times, the lease agreement has set a new national benchmark, with Tesla set to pay INR 3.87 Cr for the first year for a 4,003 sq ft space. The EV maker has signed the deal with commercial complex Maker Maxity at a monthly rental of INR 881 per sq ft, surpassing the previous record of INR 738 set by Apple in January this year.
With this, the Elon Musk-led company will take over the space on the ground floor of 2 North Avenue at the plush business district. The lease agreement, registered last week, was signed between the EV maker’s India arm, Tesla India Motors & Energy, and Univco Properties LLP for a tenure of five years.
As per the report, the lease tenure will commence starting February 16 but the automaker will get a “rent-free period” until March 31. The company is said to have already paid a security deposit of INR 2.11 Cr at the time of registration of the deal.
The rent for the premises will reportedly increase by 5% every year and will reach INR 4.7 Cr by the end of the fifth year. Notably, as per the contours of the deal, the landlord will reportedly not be able to terminate the lease during the entire term. Additionally, the agreement also includes the first lock-in period of 36 months for the tenant.
A “first lock-in period lease” refers to the initial period within a rental agreement where neither the landlord nor the tenant can terminate the contract without penalty.
The flagship showroom will showcase Tesla’s cars and pitch the company as a premium auto brand for electric vehicles.
This comes on the same day as Reuters reported that US officials have been nudging their Indian counterparts for zero tariffs on car imports under a proposed trade deal between the two nations. This comes in the backdrop of Tesla looking to make its entry into India, which imposes import duties in excess of 100% on imported electric vehicles.
Citing sources, the publication said that the Indian authorities have expressed reluctance in bringing down such duties to zero even though they have kept the door open for cuts.
“The US ask is for India to bring tariffs down to zero or negligible in most sectors, except agriculture,” a source reportedly said, adding that American officials have made it clear to New Delhi to “eliminate” auto tariffs. As per the report, Indian officials are “listening to the US” but would respond after consulting local industries.
This comes a month after the Indian government reportedly met domestic carmakers to discuss tariff cuts.
While the Centre is expected to not give in to the US demands for slashing import tariffs to zero, India last year announced a new EV policy which will allow automakers to import vehicles at 15% to 20% duties if they set up a unit in the country with a minimum investment of at least INR 4,150 Cr.
As per recent reports, the Centre plans to notify the new EV policy soon and will stipulate a minimum turnover of INR 2,500 Cr in the second year for companies applying for benefits under the scheme.
While local players like Tata Motors and Mahindra & Mahindra have batted against lowering import tariffs, global giants are optimistic about the move. At the heart of all this is the Indian EV space, which is projected to become a $132 Bn opportunity by 2030, driven primarily by two-wheeler EVs.
