The internet and the media went gaga at the prospect of seeing a Tesla running on Indian roads when the Elon Musk-led company officially set foot in the country when it opened its first shop in Mumbai in July this year. This was followed by the brand’s second showroom in Delhi which was inaugurated the following month.
The Elon Musk-led electric vehicle (EV) manufacturer, as of now, has launched the Model Y in India at a starting price of Rs 59.89 lakh (ex-showroom). However, the response from the market can be at best described as “underwhelming”.
Lukewarm response to Tesla Model Y
According to Bloomberg, the American EV giant has only received 600 bookings in India so far. That’s roughly the number of vehicles Tesla delivered every four hours globally during the first half of the year. This is far below the company’s own expectations and fuels fresh doubts about Tesla’s global growth outlook.
The report further revealed that Tesla now plans to ship between 350 to 500 cars to India this year. The first batch of Tesla Model Y vehicles from Shanghai is expected to arrive in early September, with initial deliveries restricted to Mumbai, Delhi, Pune, and Gurugram. The shipment volume is determined by the number of full payments received, along with Tesla’s current capacity to deliver beyond the four cities where it has an established presence.
Tesla had initially planned to exhaust its 2,500-car annual quota this year. However, its strategy—anchored on strong brand appeal and Elon Musk’s previously close ties with Donald Trump—has faltered. Factors such as Musk’s public rift with the US President, strained US-India relations, steep import duties, and India’s highly price-sensitive market have complicated the company’s entry into the country’s emerging EV sector.
High import duties reason for low demand?
Tesla’s lukewarm reception in India highlights the obstacles it faces while seeking growth beyond its core markets of China and the US, where challenges are already piling up. The company’s sales slipped 13% last quarter, and it is under pressure to avoid posting a second straight year of decline.
Tesla had hoped India’s steep import duties—reaching as high as 110%—would eventually be eased through US-India trade negotiations. That prospect has dimmed after Trump imposed 50% tariffs on Indian exports in retaliation for the country’s Russian oil purchases. Meanwhile, the proposed India-Europe free trade pact, which could have enabled Tesla to ship cars from its German plant at lower duties, remains unresolved.
Due to high import tariffs, the cost of Model Y is almost double of what it is offered in its homemarket. The India-spec Model Y is offered in two variants — Long Range Rear-Wheel Drive (RWD) and Long Range All-Wheel Drive (AWD). The latter is priced at Rs 67.89 lakh (ex-showroom). The Long Range RWD version delivers an estimated range of 574 km (EPA) and can accelerate from 0 to 100 kmph in 5.4 seconds. The Long Range AWD model, equipped with dual motors, provides a range of 527 km and achieves 0 to 100 kmph in 4.6 seconds.
