(Image source from: x.com/TeslaClubIN)
Tesla is getting ready to begin selling its Model Y electric vehicles in India, with a starting price of ₹60 lakh ($69,765.82), according to the prices shared on their website this past Tuesday. The rear-wheel drive Model Y costs ₹60 lakh for those who pay the entire amount, while the longer-range rear-wheel drive version is priced at ₹68 lakh. The starting costs for the Model Y in other countries are $44,990 in the United States, 263,500 yuan in China, and €45,970 in Germany. The starting cost in India is approximately $15,000 higher than the car's basic cost in the US, even without considering any government tax breaks. But, Tesla is not entering India with the intention of quickly selling a lot of cars. Instead, they seem to have a plan that might seem obvious but is not widely understood.
Tesla first showed interest in selling in India back in 2015, but real progress didn't happen for almost ten years. One big problem has been India's high import taxes, which can be as much as 100% on imported cars that are already built. Elon Musk mentioned in a tweet in 2021 that India has "by far the highest import duties in the world." He also said that Tesla wanted to see how much demand there was before deciding to manufacture in India. Now, after many years of waiting, Tesla is opening its first store in India. This opening happens as the electric car company is trying to find new markets while dealing with slower sales in its more established areas. The first store, which is 4,000 square feet, will be in the Bandra Kurla Complex, a major business area in Mumbai. It will display Model Y crossover vehicles that were made in China.
Another store is expected to open in New Delhi before this month ends. Tesla has also been hiring more people locally and has found warehouse space to help with its operations. But, the company has not yet promised to build a factory in India, even though it is now the third-largest car market in the world. Tesla's main focus now seems to be seeing how the market reacts and figuring out how much demand there is for its electric cars. "It’s not a big deal in terms of how many they’ll sell yet," said Jay Kale, an analyst at Elara Securities in Mumbai, according to Bloomberg. "But it establishes the brand. Tesla might grow its presence in the future, as charging stations get better and the car options increase.” The company is entering India at a time when it is having problems in both the United States and China, which are its two biggest markets. Tesla's sales went down in the last three months, and it wants to avoid another year of falling numbers after a difficult 2024.
— Tesla Club India® (@TeslaClubIN) July 15, 2025
In the initial three months of 2025, Tesla’s earnings from sales, after subtracting the cost of goods sold, decreased to 16.3%, from 17.4% during the same period last year. The money made from January through March reached $19.34 billion, which did not meet the expected market amount of $21.11 billion. This drop happened because people were not as interested and there was pressure to lower prices. China, which used to be a strong area for Tesla, has seen the company’s presence in the market shrink. During the initial five months of 2025, Tesla had 7.6% of the electric vehicle market in China, a drop from 10% the year before and its peak of 15% in 2020. Other local companies such as BYD and Xiaomi are attracting buyers with electric cars that include many features and have more attractive prices. Across the world, Tesla has been losing its position to the Chinese company BYD Co. For Tesla, India now offers an opportunity to grow in a large market where the use of electric vehicles is still quite low, partly because of trade limits and other difficulties.
India, which is now the third-largest car market worldwide, provides a big chance for Tesla, especially in the luxury electric vehicle area where there is still not much competition. Because the government is actively supporting electric vehicles through programs that give incentives for production and different state benefits, it is predicted that Tesla’s arrival will bring more attention and investment to this area. However, even though the Model Y is the best-selling electric car globally, it is expected to still be too expensive for most people in India. Electric vehicles make up less than 5% of the cars in India, and luxury cars are only 1% of all car sales in the country. Tesla’s main rivals in India will probably be high-end brands such as BMW and Mercedes-Benz Group AG. It is not expected to compete directly with more affordable car makers like Tata Motors Ltd., Mahindra & Mahindra Ltd., or MG Motor India Pvt.
Model Y
— Tesla India (@Tesla_India) July 15, 2025
Maximum efficiency. Smoother rides. All-new interior.
New on the outside:
- Redesigned exterior with improved aerodynamics to unlock better range, performance & longevity
- Updated wheels, tires & brakes + retuned suspension for a smoother ride
- Our single,… pic.twitter.com/10jozn8nKj
The company has said it wants to build cars in the country, which Indian officials have supported because it could help lower import costs, but Tesla has not made any official promises about this yet. In the meantime, India and the United States are talking about a trade agreement that could include lower taxes on imported cars, something that Musk has been pushing for over several years. It is not clear whether Musk’s current issues with the U.S. President Donald Trump will affect Tesla's chances of getting these tax reductions. Tesla&039;s official start in India follows the departure of its previous head of operations in India in May. However, the opening of the Mumbai showroom seems to be like Tesla's previous plan in China, where the company created excitement around its brand before starting local production and increasing its sales efforts.
