Elon Musk’s Tesla has finally launched its Model Y in India, marking the culmination of a decade-long journey. The electric vehicle giant has priced its Model Y at ₹59.89 lakh for the rear-wheel drive (RWD) variant and ₹67.89 lakh for the long-range RWD edition. This pricing strategy positions Tesla in the luxury segment, competing with premium electric SUVs like the Mercedes-Benz EQB, BMW iX1, Volvo EC40, and Kia EV6.
Despite its global success, Tesla faces significant challenges in India. The country’s steep import duty tariffs on fully built cars, currently at 15% for carmakers committing to invest and set up local manufacturing facilities within three years, contribute to the high pricing of Tesla’s Model Y. According to Kwan Wongwetsawat, a senior auto analyst at GlobalData, “Tesla’s arrival may not significantly impact overall battery electric vehicle (BEV) sales in India, but it could attract demand from consumers interested in luxury brands like BMW and Audi.”
Puneet Gupta, who leads the India and Southeast Asia teams at automotive intelligence firm S&P Global Mobility, notes that “Tesla’s entry into India marks a significant expansion of the company’s global footprint.” However, he also highlights the challenges Tesla faces, including geopolitical concerns, declining global sales, and an uncertain launch schedule for a new compact model. Gupta emphasizes that “Tesla’s entry can help India build the EV ecosystem” and “boosts people’s confidence in EVs as a category”.
India’s EV sector is projected to grow rapidly, from its current market value of $54.41 billion to $111 billion by 2029. Local manufacturers like Tata, JSW MG Motor India, and Mahindra & Mahindra dominate the space, offering competitively priced EVs tailored to India’s cost-conscious consumers. High-end electric cars, priced above $20,000, made up a minuscule 6.6% of total EV sales last year. This is where Tesla will have to compete with luxury brands.
Tesla has announced plans to set up charging infrastructure in India, with four charging stations in Mumbai and more to follow in Delhi. Isabel Fan, Tesla’s regional director, said, “We are here to create the ecosystem, to invest in the necessary infrastructure, including the charging infrastructure.” Tesla’s Model Y comes with a 4-year or 80,000km warranty and an 8-year or 1,92,000km warranty on the battery and drive unit.
Tesla’s sales have been declining globally, with a 6.3% drop in the US market and a 12% decline in China in the second quarter of 2025. Chinese EV makers are outselling Tesla in several markets, but India’s geopolitical tensions with China may give Tesla an advantage in the luxury segment. Gupta notes that “the Indian market’s positioning is a very good advantage for Tesla, where you really don’t get competition from Chinese, which is really killing Tesla both in terms of price and features”.
Tesla’s entry into India marks a significant milestone in the country’s EV sector. While the company faces challenges, its luxury offerings and investment in infrastructure may attract demand from high-end consumers. As the Indian EV market grows, Tesla’s presence could help build the ecosystem and boost confidence in electric vehicles.