Tesla is set to make its official entry into India this July by opening showrooms in Mumbai and New Delhi. The company’s first retail outlet will be launched in Mumbai by mid-July, followed by another in the capital. This move comes as Tesla seeks to expand into new markets amid a slowdown in sales across Europe and China.
Model Y Imports from China
Tesla has imported its first batch of vehicles into India — Model Y rear-wheel drive SUVs manufactured at its Shanghai plant. These vehicles are part of Tesla’s global best-selling EV lineup. Alongside the cars, Tesla has also imported Supercharger units, branded merchandise, accessories, and spare parts from China, the US, and the Netherlands.
High Import Duties Drive Up Costs
Five Model Y units were shipped to Mumbai, each valued at ₹2.77 million ($31,988). However, India’s high import duties — over ₹2.1 million per car — significantly inflate the final price. Since the imported cars are priced under $40,000, they attract India’s standard 70% import tariff, along with additional levies. The vehicles are expected to be priced above $56,000 in India before taxes and insurance.
In contrast, the same Model Y sells for $44,990 in the US, and goes down to $37,490 after tax credits. The steep pricing in India is likely to pose a challenge, especially given that premium vehicles represent less than 2% of new passenger vehicle sales in the country.
Challenges in the Indian Market
While electric vehicles are gaining traction in India, they still make up just over 5% of new car sales. Tesla’s high price point may make it difficult to attract buyers in this cost-sensitive market. Despite this, the company seems committed to building a presence, with plans to introduce more models in the future.
The company is currently operating without a country head in India following the exit of Prashanth Menon. However, Tesla has been actively hiring for roles in charging infrastructure, retail operations, and government relations.
No Plans for Local Manufacturing
India’s Heavy Industries Minister Kumara Swamy recently stated that Tesla has not shown interest in setting up a manufacturing plant in India. The company is solely focused on retail operations for now. This decision continues to stir debate, as former US President Donald Trump has criticized the idea of Tesla building factories in India, calling it “very unfair.”
Although Tesla joined the first round of consultations for India’s EV manufacturing scheme, it skipped the following two meetings, indicating limited engagement in local production plans.
Expansion in Logistics and Storage
To support its India entry, Tesla is securing warehouse space in Karnataka and expanding storage facilities near New Delhi, particularly in Gurugram. These steps suggest a long-term strategy to manage vehicle logistics and support services as Tesla establishes its footprint in the Indian EV market.
