It has been close to six months since Tesla’s India debut in July 2025, but the Elon Musk-led EV giant seems to be struggling to notch up the numbers that justify the early hoopla. According to figures available on the Vahan Dashboard, Austin, Texas-based brand managed to register around 226 units in 2025. Competitors in the luxury vehicle segment, including BMW and Mercedes, are far ahead. Of course these brands have been around longer but their sales figures speak about the potential of the segment. BMW registered 1,960 EV units in the second half of 2025, while Mercedes registered 312 units during the same period.
Overall, BMW is the leader in the luxury EV segment, with total sales ballooning 200% year-on-year (YoY) to 3,753 units in 2025. The company claims that its iX1 model, which competes directly with Tesla’s Model Y, was the highest-selling EV in the luxury segment last year.
“Tesla’s entry into India was expected to be impressive. However, a limited dealer network, a narrow product portfolio, a small local workforce, and a reliance on imports without leveraging India as a manufacturing base resulted in an underwhelming market debut.,” says Puneet Gupta, director at S&P Global Mobility for India and ASEAN. Six months into its India journey, Tesla continues to operate with just two showrooms—one in Mumbai and the other in Delhi. Unlike Vietnam-based VinFast, which chose to set up a manufacturing unit in India, Tesla decided to follow the completely built-up unit (CBU) strategy by importing fully built EVs from China. This move has significantly increased the price of Tesla’s Model Y.
The entry-level Model Y prices start at 60 lakh, far above the 20-25 lakh bracket in which most EV sales occur. The company had hoped for some tariff relief from US-India trade talks, but those negotiations stalled amid geopolitical tensions. Tesla’s reluctance to double down on aggressive marketing — the sector as a whole spent `6,000 crore in advertsing last year — has not done it any favour. Which means the brand cannot ride on its biggest asset — the tremendous equity of its maverick owner — alone to put up a meaningful contest.
So what are the options before the brand?
Time to rev up
An auto industry expert, who declined to be named, said that many potential buyers interested in purchasing a Tesla find themselves in a conundrum. As the company is in the process of setting up its India team, they are unable to connect with the right representatives for assistance or after-sales services. This has left the global EV giant without a human face in the world’s third-largest automobile market. “There are no service operators for Tesla, which is why people are wary of shelling out that sort of money,” says the expert.
Given that, the company needs to first ramp up its presence in the country. Increasing its dealership network and opening more showrooms will help improve not just reach but build consumer connect. A BMW for instance has 80 showrooms in India, while Mercedes has more than 125. Investing in EV infrastructure—such as charging stations—will tell consumers the company is not just testing waters but is here for the long run. As Nisha Sampath, managing partner at Bright Angles Consulting, points out, success in India is built equally on the after-sales reputation of brands.
Driving in the slow lane
“Customers buying premium cars are accustomed to well-oiled sales pitches, timely delivery, and reassurance of after-sales service,” she adds. “This is what builds favourable word-of-mouth and brand traction. Tesla may not need advertising campaigns, but it does need to build brand pillars around the charging ecosystem, service network, and overall brand reliability.”
Then there is the issue of investments into building local manufacturing and supply chain capabilities. “Tesla needs deep localisation in manufacturing and supply chains—particularly in markets like India, Southeast Asia, and Europe—to compete on cost, tariffs, and serviceability with incumbents,” says Yasin Hamidani, director at Media Care Brand Solutions.
On the brighter side, selling over 200 cars in four months with a new brand and two showrooms is no small feat. To deliver stronger numbers the company ought to take the Indian market far more seriously especially at a time when its sales are declining in the US, the Middle East, as well as in Europe.