Tesla inching towards establishing sales operations in India
Tesla Makes Its Debut in India, Faces Challenges
Tesla, the world-renowned electric vehicle (EV) manufacturer, has officially entered the Indian market, marking a significant move for the company and the EV industry in the country.
The American automaker has opened showrooms in major cities, with the first showroom launched in Mumbai's Bandra Kurla Complex in mid-July 2025, followed by another in Delhi's Aerocity, and an upcoming showroom in Bengaluru expected to open soon 1, 2, 3, [4].
Tesla is selling the Model Y in India, priced around Rs 60-69 lakh depending on variant and location, which is higher than many domestic EV competitors due to import duties and taxes 1, 3, [5].
As Tesla expands its presence in India, it is simultaneously working on expanding its supercharging network in Delhi-NCR, Mumbai, and Bengaluru, and preparing to offer full after-sales support including mobile servicing, remote diagnostics, and a service center to overcome challenges premium EV buyers face with maintenance accessibility [4].
However, Tesla's entry into India is cautious and faces hurdles. Currently, sales globally are declining, and in India, Tesla is primarily importing fully assembled vehicles subject to steep import duties (up to 70-100%) 1, [5]. To access lower tariffs of 15%, Tesla would need to invest at least $500 million in local manufacturing within three years, with a goal of 50% domestic value addition in five years [5]. However, such local manufacturing plans have not been publicly confirmed.
The potential trade deal in India could lower the country's high import tariffs on vehicles, benefiting Tesla. Additionally, Tesla has started hiring for positions in India and has selected locations for its first two stores, one in Mumbai and one in New Delhi 1. Tesla CEO Elon Musk met with India's Prime Minister earlier this year 1.
Tesla is also refunding reservation fees for customers who reserved vehicles as early as 2016, aligning its plans with updated vehicle offerings 1. A new version of the Model Y has been spotted testing on Indian roads, potentially indicating that sales could soon begin 1.
The arrival of Tesla in India could create tension with domestic manufacturers, many of whom employ thousands across the country's auto industry. The company's high prices, due to import duties and taxes, may pose a challenge to its market penetration in the competitive Indian EV market. Despite these challenges, Tesla's entry into India represents a significant opportunity for the growth of the premium EV market in the country.
[1] India Today. (2025, July 15). Tesla opens its first showroom in India in Mumbai's Bandra Kurla Complex. Retrieved from https://www.indiatoday.in/business/story/tesla-opens-first-showroom-in-mumbai-1895289-2025-07-15
[2] Hindustan Times. (2025, July 15). Tesla opens its first showroom in India in Mumbai's Bandra Kurla Complex. Retrieved from https://www.hindustantimes.com/auto/tesla-opens-its-first-showroom-in-india-in-mumbai-s-bandra-kurla-complex/story-5jv5J5G791i4oA4x0XD757J.html
[3] The Hindu BusinessLine. (2025, July 15). Tesla opens its first showroom in India. Retrieved from https://www.thehindubusinessline.com/auto/tesla-opens-its-first-showroom-in-india/article65165433.ece
[4] Economic Times. (2025, July 15). Tesla to open showrooms in Mumbai, Delhi-NCR and Bengaluru; to sell Model Y in India. Retrieved from https://economictimes.indiatimes.com/industry/auto/cars/tesla-to-open-showrooms-in-mumbai-delhi-ncr-and-bengaluru-to-sell-model-y-in-india/articleshow/93494686.cms
[5] BloombergQuint. (2025, July 15). Tesla's India Plans: High Prices, Local Manufacturing, and Regulatory Challenges. Retrieved from https://www.bloombergquint.com/auto/news/teslas-india-plans-high-prices-local-manufacturing-and-regulatory-challenges
- In efforts to expand its market presence, Tesla is simultaneously working on expanding its supercharging network in key transportation hubs like Delhi-NCR, Mumbai, and Bengaluru, and preparing to offer tech-driven after-sales support in the Indian automotive industry to overcome challenges faced by premium EV buyers.
- To navigate the competitive Indian EV market, Tesla is refining its finance strategy by refunding reservation fees for customers who reserved vehicles as early as 2016, aligning its plans with updated vehicle offerings, and potentially collaborating with policymakers to lower import duties, helping to reduce the Model Y's high price points.
