Elon Musk’s Tesla has officially entered into the Indian EV market by launching its Model Y electric SUV. The car made its debut at Tesla’s first showroom in Mumbai, with bookings now open and deliveries expected to begin in the third quarter of this year. But there’s a catch, the Model Y, which is launched with a fancy price tag of Rs 61 lakh (ex-showroom) in India is being sold at $37,490 (roughly Rs 32 lakh) in the United States. 

The steep difference in pricing caused a major frustration among the Indian consumers on social media, an X (formerly Twitter) user named Sumit Behal shared a post where he pointed out that buyers in India will end up paying approximately Rs 29 lakh in taxes on top of the US price for the Model Y.  “Tesla has launched the Model Y in India at a price of Rs 61 lakh. This model gets sold at Rs 32 lakh ($37,490) in the USA and you will be paying tax of Rs 29 lakh tax to the government in India during the purchase,” he wrote.

“Thank you for your contribution in India’s growth story,” Behal added.

Tesla prices in US vs India: What makes the Tesla Model Y twice as expensive in India?

According to Tesla India’s website, only the Model Y is currently available which comes in two variants, the standard Rear-Wheel Drive priced at about Rs 61.07 lakh and the Long Range Rear-Wheel Drive at Rs 69.15 lakh (ex-showroom) in India. 

In the US, the Model Y is priced at $37,490 (around Rs 32 lakh) after applying a $7,500 federal tax credit – almost half of what it costs in India.

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The main reason behind the price disparity of Tesla Model Y in India is the high import duty on completely built units (CBUs). Currently, Tesla imports fully assembled vehicles into India, which are subject to import duties that significantly raise their prices:

A 100% import duty applies if the car’s CIF (Cost, Insurance, Freight) value exceeds $40,000.

A 70% duty is levied on vehicles priced below this threshold.

This import duty structure sharply increases the cost of Tesla vehicles for Indian consumers, making them nearly twice as expensive as in the US.

Online discussion ignited

The post has gained around four lakh views and ignited a lively discussion online, a user saw this price difference and tax issue as a ‘big opportunity’ for India! Under the same post of Behal, he wrote, “There’s a big opportunity for India if we can build better EVs priced much lower than Tesla. It won’t be easy, but work is underway. India’s youth must work hard, think rationally, be technically equipped, and stay disruptive. Govt must invest heavily in education, or we risk falling behind.”

Another user pointed out the local manufacturing factor by writing, “China and Germany have their own manufacturing plants, that is the difference here.”

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Others shifted the focus from taxes to public services, noting that paying high taxes might be acceptable if citizens actually received quality services in return. “The issue is not with taxes but the services we get in return.. One can still will to pay taxes but what bothers is that we don’t even receive 20% facilities.”

One sarcastically lamented, “After paying price for 2 tesla you get only one in India and then you have to drive on potholes if you are lucky, you might get waterlogged roads. Btw congratulations we are 4 trillion economy”