Model 3 Refunds: Tesla Hits Refresh in India's EV Saga

Tesla has begun refunds on early reservation fees of its Model 3 sedan in India as part of its new strategy in the country. The customers, who had placed bookings for the Model 3 back in 2016, are being paid their reservation fee as the firm retires the older model of the vehicle. The development is accompanied by Tesla's assurance that it will connect with these buyers again once it has decided what to offer the Indian market.

The development is being timed with Tesla CEO Elon Musk's impending visit to India this year. This is in tandem with the current discussions between India and the United States on trade, which has the potential to bring down the tariffs for imported cars. These changes could make Tesla's cars more affordable to Indian buyers and transform its strategy of entering the world's third-largest car market.

India's expanding prosperous middle class represents a profitable market for high-end electric vehicles. But the entry of Tesla might be troublesome for local automakers, affecting local production and jobs. This new enthusiasm in India follows a difficult year for Tesla, where deliveries of vehicles all over the world fell for the first time in more than ten years amid increased rivalry, especially from China's BYD Co.

Tesla's entry into new markets such as India is viewed as a tactical strategy to meet competitive pressures and tackle slowing demand in mature markets.

Sources: Bloomberg, CNBC TV18, GuruFocus.