TLDR
- Tesla launched in India with Model Y priced at $70,000, the highest price among major markets due to steep import tariffs
- The company opened its first showroom in Mumbai and began taking orders, targeting India’s luxury EV segment
- Tesla’s U.S. sales dropped 13% year-over-year in Q2, worse than the 9% decline in Q1
- Overall U.S. EV sales fell 6% in Q2, marking the first quarterly decline since 2021
- Tesla stock was up 0.3% in premarket trading despite the challenging sales environment
Tesla made its long-awaited entry into India’s electric vehicle market on Tuesday, launching the Model Y at approximately $70,000. This marks the company’s highest pricing among major global markets.
The launch comes as Tesla grapples with declining sales in its home market. The company opened its first showroom in Mumbai and began accepting orders through its website.
Tesla’s Model Y rear-wheel drive is priced at 6 million rupees ($70,000), while the long-range version costs 6.8 million rupees. These prices dwarf the $44,990 starting price in the United States and the $36,700 cost in China.
The steep pricing reflects India’s punitive import tariffs. Duties and related levies can exceed 100%, forcing Tesla to pass these costs onto consumers.
Deliveries are expected to begin in the third quarter. Tesla will compete primarily with German luxury brands like BMW and Mercedes-Benz rather than domestic players like Tata Motors and Mahindra.
The company displayed vehicles manufactured in China at its Mumbai showroom. Tesla’s U.S. factories don’t currently produce right-hand drive vehicles required for the Indian market.
Challenges Mount in Home Market
Tesla’s Indian expansion comes as the company faces headwinds in the United States. According to Cox Automotive data, Tesla’s U.S. sales dropped 13% year-over-year in the second quarter.
This performance was worse than the 9% decline recorded in the first quarter. The company sold 4,306 Cybertrucks during Q2, down 51% from the previous year.
Overall U.S. EV sales fell 6% to approximately 311,000 vehicles in Q2. This marked the first quarterly decline since 2021, according to Cox Automotive records.
The Model Y showed some resilience, with sales rebounding to about 86,000 units from 64,000 in Q1. However, this wasn’t enough to offset broader weakness across Tesla’s lineup.
EV market share has also contracted. Electric vehicles accounted for about 7% of all new car sales in Q2, down from a peak of nearly 9% in Q3 2024.
Policy Changes Loom
The EV industry faces additional uncertainty from policy changes. President Donald Trump’s One Big Beautiful Bill Act eliminates federal EV purchase tax credits in September.
Stephanie Valdez Streaty, senior analyst at Cox Automotive, expects Q3 to be a record quarter followed by a collapse in Q4. She described the second half of the year as “a critical test of EV demand.”
Government-backed incentives ending in September could create a rush of purchases before the deadline. However, the long-term impact remains unclear.
Tesla stock was trading up 0.3% at $317.96 in premarket trading Tuesday. The shares have declined about 22% year-to-date coming into Tuesday’s session.
Maharashtra Chief Minister Devendra Fadnavis attended the Mumbai launch. He expressed hope that Tesla would eventually establish research and development operations in India.
The company’s Full Self-Driving capability is available in India for an additional 600,000 rupees. Tesla promises future updates will enable operation with minimal driver intervention.
Police guarded the Mumbai showroom as media gathered outside for the launch event. The facility is located in an office complex in India’s commercial capital.
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