Elon Musk’s Tesla opens its first showroom in Mumbai and launches the Model Y SUV in India—can the EV giant overcome regulatory hurdles and pricing pressures to thrive in this booming auto market?
After years of anticipation, Elon Musk’s Tesla has finally made its debut in India, marking a major milestone for the global electric vehicle (EV) leader. The company has opened its first showroom in Mumbai’s premium Bandra Kurla Complex and has started accepting bookings for its flagship Model Y SUV. According to a Reuters report, a second Tesla experience centre in Delhi is also expected to launch soon.
Despite the excitement around this long-awaited entry, Tesla’s India debut raises more questions than answers regarding its future in the world's third-largest auto market, which recently surpassed Japan in total vehicle sales.
Tesla is launching the Model Y SUV as a fully built import, with pricing starting at ₹60 lakh for the base rear-wheel-drive variant and ₹68 lakh for the long-range version. These vehicles are being shipped from Tesla’s Gigafactory in Shanghai, the company’s main export hub for Asia and Europe.
This makes the Model Y one of the most expensive Teslas globally, far exceeding the $44,990 price in the US and the 263,500 yuan cost in China. The steep price in India is largely due to import duties that can exceed 100%, making it difficult for imported EVs to compete on price.
While India now ranks as the third-largest auto market globally, Tesla is entering a niche category. Luxury EVs account for just 4-5% of total car sales in India. Tesla’s initial rollout appears cautious, with only six Model Y units imported along with Supercharger equipment and accessories worth $1 million, according to Reuters.
“Tesla is currently too expensive for most of the Indian consumers, despite a strong brand presence already existing within the country,” said Ross Maxwell, Global Strategy Lead at VT Markets. “The immediate impact of the launch of Tesla’s Model Y may be limited, but the longer-term strategic benefits may boost its growth trajectory in the years to come.”
One of Tesla’s biggest hurdles in India is its high import duty structure on completely built units (CBUs). These duties, among the highest globally, severely restrict Tesla’s ability to price competitively.
Currently, India and the United States are discussing a trade agreement, with Washington pushing for lower EV tariffs as part of a broader goal to double bilateral trade by 2030, Business Standard reports.
However, geopolitical uncertainty clouds the outcome. A potential return of Donald Trump—known for his skepticism toward EVs and climate policies—to the White House could undermine negotiations. Moreover, Musk’s tense relationship with Trump adds complexity to any diplomatic lobbying.
“India is a fast-growing but untapped market in the EV sector, with EV adoption below 2% even though it is the third-largest auto market globally,” Maxwell stated. “The Indian government has been in talks to offer tax benefits and subsidies to manufacture locally, offering Tesla a great opportunity to source and manufacture locally, boosting margins and making vehicles more affordable.”
Tesla’s delayed arrival has given other automakers a head start:
German brands like BMW, Mercedes-Benz, and Audi already have EVs running on Indian roads with robust service networks and brand loyalty.
BYD (Build Your Dreams), the Chinese EV leader that has recently overtaken Tesla in global EV sales, has introduced models like the Sealion 7 in India.
Although BYD's growth is restricted by India’s foreign direct investment rules, any future joint ventures could pose a serious challenge to Tesla’s position.
Tesla’s current pricing and import strategy may restrict the Model Y to a luxury niche, appealing only to affluent buyers in metro cities. Without local manufacturing, Tesla risks becoming a premium boutique brand in India rather than a mainstream EV leader.
Meanwhile, homegrown automakers like Tata Motors and Mahindra are scaling up fast, offering affordable EVs targeted at India’s large middle-class population.
“Tesla’s India chapter has begun. But whether it becomes a dominant player or just a boutique brand depends on how it navigates India’s complex mix of policy, politics and pricing.”