In conclusion, the Model Y, which will retail for ₹60 lakh, marks Tesla’s official entry into the Indian market. In spite of high import taxes and other challenges in countries like the U.S. and China, Tesla is launching its first showroom in Mumbai, demonstrating a strategy focused more on brand marketing than quick sales. The company aims to use India’s economic potential in the context of ongoing trade discussions and increasing competition from regional EV manufacturers.
The Model Y electric car will start at ₹60 lakh (about 765.82) in India, according to the pricing list that was posted on Tesla’s website on Tuesday. Customers who pay in full up front will be able to get the rear-wheel drive Model Y for that amount, while the long-range model would cost ₹68 lakh.
The Model Y, by contrast, starts at €45,970 in Germany, 263,500 yuan in China, and $47,990 in the United States. This indicates that, before any federal tax breaks, the price in India is about $1,000 more than the base price in the United States.
Tesla is not, however, going into the Indian market with the intention of pursuing large sales volumes right away. The business appears to have a more comprehensive plan in place.
In 2015, Tesla first expressed interest in India, but little real headway was achieved for almost ten years. The high import taxes imposed by India, which can reach 100% for fully constructed units (CBUs), have been one of the main obstacles.
In a 2021 social media post, Elon Musk remarked that India’s import duties were “some of the highest globally.” He added at the time that Tesla intended to assess demand before deciding to start production in India.
Tesla has now finally established its first showroom in the nation following years of conjecture. The corporation is making this move in an effort to counteract the weakening demand in its main markets and enter new ones. The first showroom, which occupies 4,000 square feet, is situated in the Bandra-Kurla Complex, a well-known financial centre in Mumbai. It will showcase the Model Y crossover, which is made in China.
Tesla is expected to open its second showroom in New Delhi by the end of this month. To support its operations, the company has also expanded its local workforce and secured warehouse facilities.
India is currently the third-largest vehicle market in the world, but Tesla has not committed to constructing a manufacturing plant there. The corporation is currently concentrating on measuring consumer interest in its electric vehicles and brand reception.
“This isn’t significant in terms of immediate sales,” J. Bloomberg quoted Kale, an analyst from Mumbai’s Elara Securities, as saying. However, it creates the brand. As the portfolio grows and charging infrastructure advances, Tesla may eventually increase its footprint.
At a time when it is encountering challenges in its two biggest markets, China and the United States, Tesla is expanding into India. After a tough year in 2024 and a dip in sales last quarter, Tesla is now aiming to steer clear of another year of setbacks.
Tesla’s gross margin slipped to 16.3% in Q1 2025, down from 17.4% during the same quarter last year.
Due to pricing constraints and poor demand, revenue from January to March was .34 billion, below the market’s estimates of .11 billion.
Tesla has suffered a drop in market share in China, which was formerly one of its strongest markets. During the first five months of 2025, Tesla held a 7.6% share of China’s EV market—down from 10% the previous year and a peak of 15% in 2020. Homegrown rivals like BYD and Xiaomi are drawing buyers with more feature-rich and budget-friendly electric vehicles.
Globally, Chinese manufacturer BYD has been gaining market share from Tesla. India now presents a viable growth path for Tesla in a sizable market where EV penetration is still comparatively low because of trade restrictions and other difficulties.
The Model Y is predicted to stay out of reach for the majority of Indian consumers, even if it is the best-selling electric vehicle in the world. Luxury automobiles only make up 1% of all vehicle sales in India, and EVs still make up less than 5% of the country’s auto market.
Rather than mass-market producers like Tata Motors, Mahindra & Mahindra, or MG Motor India, Tesla’s primary rivals in India are probably luxury brands like Mercedes-Benz and BMW.
Although Indian authorities applaud the company’s interest in local manufacturing since it might lower import costs, Tesla has not yet made any official pledges.
In the meantime, Elon Musk has been pushing for years for a trade deal between the United States and India that would include reduced import taxes on automobiles. It’s unclear, though, if Tesla’s chances of obtaining such tariff relief will be impacted by his current conflicts with US President Donald Trump.
The introduction of him in India follows the resignation of the company’s previous head of operations in India in May. However, the launch of its showroom in Mumbai is similar to Tesla’s previous approach in China, which involved building brand awareness before moving into local production and ratcheting up sales.