Tesla Inc., the electric vehicle pioneer helmed by Elon Musk, has finally made its long-awaited entry into India with the launch of its Model Y SUV, priced at a steep ₹6 million ($69,770).
The company inaugurated its first showroom in Mumbai on Tuesday, formally stepping into the world’s third-largest automobile market, although its initial approach remains cautious and premium-focused.
The rear-wheel-drive Model Y has been listed on Tesla’s India website for ₹6 million, with the long-range version costing ₹6.8 million.
These prices mark the highest globally for the same vehicle. Tesla’s high pricing in India is primarily due to the country’s steep import duties on fully assembled cars, which can go as high as 70%.
In comparison, the Model Y starts at $44,990 in the United States, 263,500 yuan (approximately $36,700) in China, and €45,970 (about $53,700) in Germany.
Tesla enters niche EV segment to compete with BMW, Mercedes-Benz
Tesla’s Indian operations will begin with imported units, and customer deliveries are expected to start from the third quarter of 2025.
The company is targeting India’s small but growing premium EV segment, which currently accounts for only about 4% of total electric vehicle sales.
With the launch, Tesla positions itself to compete with global luxury names like BMW and Mercedes-Benz rather than homegrown EV manufacturers such as Tata Motors and Mahindra & Mahindra.
Tesla has already shipped six Model Y SUVs from its Shanghai Gigafactory to Mumbai for display and demonstration purposes.
According to auto portal Carwale, these vehicles will serve as initial showcases while Tesla gauges consumer interest.
Meanwhile, Reuters reported that Tesla has imported about $1 million worth of goods into India, including vehicles, chargers, and accessories, sourced mainly from China and the United States.
Bookings for the Model Y are open on the company’s Indian website, which lists the on-road price in Mumbai at ₹6.1 million.
A deposit of ₹22,220 is required to reserve the vehicle.
Tesla is also offering its Full Self-Driving (FSD) package for an additional ₹600,000, with promises of gradual software enhancements via over-the-air updates.
The current version of FSD requires driver supervision and is not yet fully autonomous.
Brand establishment before scaling
Despite lobbying for reduced duties for several years, Tesla chose to test the Indian market through imported units rather than wait for a complete manufacturing ecosystem to fall in place.
While the current approach is volume-light, it gives Tesla visibility in a growing market.
Industry analysts believe Tesla’s entry into India is more about establishing its presence than chasing immediate scale.
“It’s not meaningful from a volume standpoint yet,” Bloomberg quoted Jay Kale, an analyst at Elara Securities based in Mumbai, as saying.
“But it plants the brand. Over time, as charging infrastructure improves and the lineup expands, Tesla could scale.”
As India continues to develop its EV charging infrastructure and incentivizes domestic production, Tesla may consider a factory at a later stage.
For now, the company appears focused on evaluating brand acceptance, infrastructure readiness, and regulatory clarity.
Testing Indian waters amid global pressures
Tesla’s India entry also comes at a time when the company is navigating significant headwinds in its top markets — the US and China.
In the first quarter of 2025, Tesla reported revenue of $19.34 billion, missing analyst expectations of $21.11 billion.
The company’s gross margin fell to 16.3%, compared to 17.4% a year earlier.
In China, Tesla’s once-dominant EV market share has slipped due to fierce competition from local players.
In the first five months of 2025, Tesla accounted for just 7.6% of China’s EV sales, down from 10% in 2024 and a peak of 15% in 2020.
Domestic brands such as BYD and Xiaomi have steadily gained ground with feature-rich and more affordable alternatives.
Global competition from BYD is also eating into Tesla’s overall market share. With its dominance under threat, India represents a potentially important, albeit long-term, growth frontier.
Government tweaks EV policy to attract Tesla
India’s government responded to Tesla’s concerns last year by unveiling a new EV policy aimed at attracting global manufacturers.
The scheme allows approved companies to import up to 8,000 completely built electric vehicles per year at a reduced Customs duty of 15%—down from 70%—if they commit to investing at least ₹4,150 crore (roughly $500 million) in setting up local manufacturing.
To be eligible, companies must have global revenues of ₹10,000 crore or more and fixed assets worth at least ₹3,000 crore.
Although Tesla has yet to officially commit to building a plant in India, this policy has been widely viewed as a direct effort to lure the company.
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