Tesla Inc.’s highly anticipated arrival in India has not gone as smoothly as many expected. Since its launch in mid-July, the company led by CEO Elon Musk has received just over 600 orders for its Model Y electric SUV. That figure is a long way from Tesla’s internal goal of delivering its full annual quota of 2,500 imported cars.
Key Takeaways
- Tesla has received only about 600 orders in India since its mid-July launch.
- The company had aimed to sell 2,500 cars in its first year.
- Import duties of up to 110% make Tesla vehicles too expensive for most buyers.
- Initial deliveries will be limited to Mumbai, Delhi, Pune, and Gurugram.
- Weak India sales mirror Tesla’s broader global slowdown.
High Price Tag Deters Buyers
The biggest hurdle appears to be the cost. Tesla is importing the Model Y as a Completely Built Unit, which subjects it to import duties of up to 110 percent. This pushes the ex-showroom price of the entry-level Model Y above ₹60 lakh.
By comparison, the average price of an electric vehicle in India is closer to ₹22 lakh. Even among luxury car buyers, ₹60 lakh and above is not a casual purchase. It places Tesla in a very small, high-end niche. According to data from JATO Dynamics, only about 2,800 electric cars priced between ₹45 lakh and ₹70 lakh were sold in India in the first half of 2025.
Cautious Launch Strategy
In response to the lower-than-expected demand, Tesla has trimmed back its initial rollout. Instead of shipping 2,500 cars this year, it now plans to send only 350 to 500. The first batch from Tesla’s Shanghai plant is scheduled to arrive in early September. Deliveries will start only in Mumbai, Delhi, Pune, and Gurugram.
Tesla has also begun laying down some groundwork in India. The company recently opened two showrooms, branded as Experience Centres, in Mumbai’s Bandra Kurla Complex and Delhi’s Aerocity. Supercharger stations are also being installed in these cities. This measured approach suggests Tesla is testing the market carefully while managing its global business pressures.
Global and Local Headwinds
The sluggish start in India comes as Tesla faces difficulties elsewhere. Globally, sales fell by 13 percent last quarter, marking the company’s first annual decline in more than ten years. Competition is heating up in China, Tesla’s largest market, where local rivals are catching up quickly.
In India, the landscape is no easier. Players such as BYD, Tata Motors, and Mahindra already have a strong presence and are competing aggressively in a market that is extremely price sensitive. Tesla had hoped that import tariffs might be lowered, which would have allowed more competitive pricing, but that has not materialized.
The result is a difficult entry for Tesla. The company’s brand power alone has not been enough to guarantee success in India, a market with its own complexities and constraints. Whether Tesla can adapt its strategy in the coming months will determine if it can gain a stronger foothold here.
FAQs
Q. Why are Tesla cars so expensive in India?
A. Tesla cars are imported as completely built units (CBUs). This means they are subject to very high import duties, which can go up to 110%. This tax makes the final price of the car much higher than its cost in other countries.
Q. Which Tesla model is sold in India?
A. Currently, Tesla is only selling the Model Y in India. It is available in two variants: the Rear-Wheel Drive (RWD) and the Long Range Rear-Wheel Drive (LR RWD).
Q. What is the price of a Tesla Model Y in India?
A. The price of the Tesla Model Y in India starts at around ₹59.89 lakh (ex-showroom) for the RWD variant and ₹67.89 lakh (ex-showroom) for the LR RWD variant.
Q. When will Tesla deliveries begin in India?
A. The first batch of Tesla Model Y cars is expected to arrive in India in early September, with deliveries starting shortly after in the four initial launch cities.
Q. Why did Tesla not reduce prices for the Indian market?
A. Tesla chose not to set up a manufacturing plant in India, which would have allowed it to avoid high import taxes. Instead, it lobbied the Indian government for lower duties on imported EVs. When those efforts did not succeed, the company launched the Model Y with high import duties factored into the final price.
