Tesla’s India Launch Stalls
Tesla’s entry into India in mid-July 2025 has been far below expectations. As of now, the company has secured just over 600 confirmed orders compared to its year-long target of 2,500 vehicles for 2025.
Heading into the year, Tesla planned to import its Model Y from Shanghai and began deliveries in early September, focusing on major cities like Mumbai, Delhi, Pune, and Gurugram—where it had built showrooms and service infrastructure ReutersIndiatimes.
Price Tag Too High for Indian Buyers
At the root of Tesla’s slow uptake are India’s steep import duties—which nearly double the cost of the car. As a result, the entry-level Model Y now costs more than ₹60 lakh (over US $70,000)—far above the ₹22 lakh average price of most EVs sold domestically.
By contrast, more affordable EVs dominate the market. Even Chinese rival BYD, selling at around ₹49 lakh, sold more than 1,200 units of its Sealion 7 SUV in the first half of 2025 under similar tariff constraints Drive TeslaMitrade.
Infrastructure & Strategy Limit Expansion
Tesla is limiting its 2025 import volumes to just 350–500 units, effectively abandoning plans to fulfill its full 2,500-car quota, given low demand and high costs.
Deliveries are confined to the handful of cities where Tesla has opened showrooms and begun installing Supercharger stations. Expansion beyond these hubs remains uncertain, as India’s charging infrastructure is still nascent ReutersThe Economic TimesIndiatimes.
Trade Tensions Add Pressure
Tesla had hoped that trade deals or tariff relief would help reduce costs over time—but growing India–U.S. trade friction, including a U.S. duty on Indian exports, and a stalled India–Europe trade pact, dampen the chances of tariff cuts.
Further complicating things, a recent Indian tax panel has proposed hiking the GST on luxury EVs from 5% to potentially 40%, targeting high-end imports like Tesla’s Model Y Reuters.
Broader Market & Tesla’s Global Slowdown
Tesla entered the Indian market with an eye on a small premium niche—only around 2,800 EVs priced between ₹45 lakh and ₹70 lakh were sold across the country in the first half of 2025.
Meanwhile, Tesla’s global vehicle sales declined 13% in the first half of 2025, including drops in China and the U.S., putting further pressure on its international growth strategy Barron’sThe Economic Times.
What Lies Ahead?
Tesla’s underwhelming debut in India underscores the challenge of entering a price-sensitive, infrastructure-limited, and tightly regulated market. Without local manufacturing or favorable duty structures, premium imports face steep hurdles.
The company appears to be taking a cautious, long-game approach—establishing showrooms, building charging networks, and testing the waters—while it keeps its Gigafactory plans in India on hold amid financial and strategic pressures AutoweekFinancial Times.
Key Highlights
- ~600 orders received since July launch vs. 2,500 annual target
- Model Y priced above ₹60 lakh, far above ₹22 lakh EV segment norm
- Deliveries limited to Mumbai, Delhi, Pune, Gurugram—first lot from Shanghai
- Import duties & proposed GST hikes eroding cost competitiveness
- Trade tensions and stalled deals blocking tariff relief
- EV infrastructure gaps hinder broader rollout
- Tesla faces global sales slowdown, undermining scale-out plans
Tesla’s experience so far signals that, in India’s evolving EV market, a premium play without local production or aggressive pricing may struggle—especially where affordability and infrastructure drive consumer choice.
