Tesla has officially entered the Indian market, opening its first showroom in Mumbai on Tuesday. The inauguration, attended by Maharashtra Chief Minister Devendra Fadnavis, marks a significant milestone for Elon Musk’s electric vehicle (EV) company as it seeks new growth avenues amid declining sales in the US and Europe. However, Tesla’s India debut comes with challenges—most notably, the country’s steep import tariffs, which have long delayed its entry.
Initially, Tesla is expected to sell vehicles imported from China, with deliveries likely to begin in late August. The Model Y, Tesla’s most affordable offering in India, starts at around $70,000—nearly twice its US price after federal tax credits. This premium pricing places Tesla in direct competition with luxury carmakers rather than mass-market EV buyers. Analysts suggest the company will focus on brand-building rather than volume sales in the short term.
India’s EV market, though growing rapidly, remains small—accounting for less than 3% of total car sales in 2024. Tesla’s high price point may further limit its reach, with Counterpoint analyst Soumen Mandal projecting initial sales of 500-700 units, tapering to 200-300 per month thereafter. The company has yet to commit to local manufacturing, a key requirement for New Delhi to consider reducing import duties on EVs.
Tesla’s India push coincides with ongoing US-India trade talks, which could lead to lower auto tariffs. For now, the company faces an uphill battle in a market dominated by affordable EVs and hesitant luxury buyers. While Tesla’s brand appeal is strong, its long-term success in India will depend on local production, competitive pricing, and the expansion of charging infrastructure. The Mumbai showroom is just the first step in what promises to be a closely watched journey.