Tesla Debuts With India’s Most Expensive Model Y, Deliveries Set Amid Heated Debate

Tesla officially launched its Model Y in India on July 15, introducing the electric SUV with a starting price near $70,000, the highest among Tesla's global markets.

The launch in Mumbai also included the opening of Tesla's first showroom, with plans for another in Delhi, marking the company’s long-anticipated entry into India’s complex automotive market.

How will India’s high tariffs shape Tesla’s market debut?

Tesla’s vehicles are currently imported, facing import tariffs and duties near 100%, which significantly inflate prices. As a result, the Model Y in India is roughly 50% more expensive than in the US and China.

This steep pricing positions Tesla’s Model Y in India as a luxury vehicle competing mainly against established German brands like BMW and Mercedes-Benz, rather than local mass-market EV players.

Did you know?
India’s electric vehicle market currently accounts for around 4% of overall vehicle sales, highlighting Tesla’s focus on a growing but niche segment.

What challenges does Tesla face competing in India’s EV segment?

India’s electric vehicle market is still emerging, representing just about 4% of total vehicle sales. High costs, limited charging infrastructure, and tariff barriers impede the wider adoption of electric vehicles.

Elon Musk has publicly denounced the high tariffs and is persistently advocating for their reduction. Meanwhile, India’s government remains engaged in talks to lower import duties under bilateral trade discussions with the US.

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Tesla targets niche luxury buyers with the costly Model Y

Tesla’s Model Y rear-wheel drive starts at around 6 million rupees ($70,000), while long-range variants reach nearly 6.8 million rupees.

For an additional 600,000 rupees, buyers can add Tesla’s Full Self-Driving package, promising future software updates for automated driving capabilities.

Elon Musk eyes future manufacturing and R&D in India

Despite launching with imports, Tesla’s Mumbai chief expects to expand into research, development, and manufacturing locally at an appropriate time.

Maharashtra Chief Minister Devendra Fadnavis expressed optimism about Tesla’s entry and the potential for innovation and investment within India’s automotive industry.

Tesla’s debut in India highlights the challenges of balancing high prices with growing electric vehicle demand while also foreshadowing a longer-term strategic commitment to the country’s fast-evolving market.