Tesla Inc. is set to open its first showrooms in India in July, people familiar with the discussions said, kicking off formal operations in the world’s third-biggest automobile market as the Elon Musk-led firm hunts for growth amid falling sales in Europe and China.

The electric vehicle giant’s first set of cars have arrived in the country — Model Y rear-wheel drive SUVs shipped from Tesla’s China factory, according to the people, who asked not to be identified as the information is private, as well as documents seen by Bloomberg News. The Model Y is the world’s largest-selling electric car.

Tesla is set to open its first showroom in Mumbai as early as mid-July, which will be followed by one in New Delhi, according to the people. It has also imported Supercharger components, car accessories, merchandise and spares from the U.S., China and the Netherlands, the documents show.

The debut will end a years-long on-again, off-again saga over Tesla’s entry into India — a market Musk has long eyed but held back from entering due to disagreements over tariffs and local manufacturing. The breakthrough in bringing Tesla to India comes after Musk met Indian Prime Minister Narendra Modi in the U.S. in February.  

Bloomberg News reported in February that Tesla was set to ship a few thousand cars to a port near Mumbai.

Tesla spokespersons did not immediately respond to an email seeking comment on opening of the India showrooms and the preparations underway.  

Premium Price

Five Model Y vehicles have already arrived in Mumbai from Tesla’s Shanghai factory, according to documents reviewed by Bloomberg News. The cars were declared at 2.77 million rupees ($31,988) and attracted more than 2.1 million rupees in import duties — a levy that’s consistent with India’s 70% tariff on fully-built imported cars under $40,000 plus surcharges, the documents show.

The model is expected to go on sale for more than $56,000 before taxes and insurance, though Tesla will determine the final sticker price based on its margin and positioning strategy, according to people familiar with the plans. 

That compares with an ex-showroom price of $44,990 for the same model in the U.S., which sells for $37,490 once tax credits are applied.

The premium price tag will likely be a major hurdle to Tesla’s plans, as the automaker will need to convince value-driven consumers to open their wallets. EVs account for just over 5% of new passenger vehicle sales in India, but premium cars still represent less than 2% of the market, data with Indian government’s vehicle registration portal show.

Beefing Up

The company hasn’t appointed a new country head following the departure of Prashanth Menon, but is beefing up hiring across charging, retail and policy teams, according to people familiar with the matter.

The Model Y imports represent an initial foray into the market, and Tesla plans to expand its presence, including offering more models. 

It’s leasing warehouse space in Karnataka, in India’s south, and is adding more in Gurugram, outside New Delhi, the people said.

Tesla executives from other countries are making weekly visits, the people said, to the Mumbai and New Delhi showrooms, which are in high-profile, luxury business precincts in an effort to attract affluent shoppers.