If you had wanted to buy a Tesla Model Y with some sizeable discounts, you might be in luck in early 2026. The Elon Musk-owned American electric vehicle company is reportedly facing an early setback in its India debut. It is said that roughly one-third of the Model Y SUVs imported last year remain unsold, prompting targeted discounts of up to Rs 2 lakh ($2,200) on select variants to clear inventory. The discounts, offered directly to customers and test-drive seekers rather than as a nationwide promotion, apply primarily to the lower-priced Standard Range Model Y vehicles shipped from Shanghai in 2025.
Tesla entered the Indian market in July 2025 with the Model Y as its sole offering, priced starting at around Rs 60 lakh (nearly $70,000 ex-showroom) for the base variant, facing steep 110% import duties on completely built-up (CBU) vehicles. The company shipped approximately 500 Model Y units in 2025, with the first batch arriving in early September. Initial enthusiasm generated about 600 bookings (as reported in September 2025), but actual registrations lagged significantly.Â
Only 227 Tesla vehicles were registered in India throughout 2025, according to official VAHAN data, thus leaving a large inventory of unsold vehicles in the stock.
Tesla’s India inventory challenges and buyer backouts
Sources familiar with the matter revealed that around 100 units from an initial shipment of roughly 300 Model Y SUVs are still unsold four months after arrival. Many early booking holders backed out after test drives, citing high prices, limited brand familiarity in the Indian luxury EV segment, and preference for more affordable or feature-rich alternatives.
Buyers have increasingly turned to competitors like:
BMW iX1 — locally assembled EV from BMW, with sales jumping nearly 200% to around 3,700 units in 2025.
BYD Sealion 7 and other models — contributing to BYD’s 88% registration growth to over 5,400 units last year.
These rivals offer lower entry prices, better-equipped options, superior branding and good accessibility, thus making them more appealing despite Tesla’s strong global brand appeal.
Tesla faces global slowdown
The lukewarm sales performance in India mirrors Tesla’s broader global challenges, where 2025 sales declined for a second consecutive year, and the company was overtaken by BYD as the world’s top EV seller. Factors such as increasing competition, waning subsidies in key markets, and economic pressures have impacted demand worldwide.
Tesla has not publicly commented on the discounts or inventory situation, and there have been no official response to media queries. The company hired former Lamborghini India head Sharad Agarwal in November 2025 to lead local operations and attract luxury buyers, hinting ongoing commitment to the market. However, no immediate plans for local manufacturing or additional models have been announced, leaving Tesla reliant on imports amid high duties.
