Tesla is set to open its first showroom in Mumbai as early as mid July, followed by another in New Delhi’s Aerocity. This marks a major step in Tesla’s global growth. However, questions remain about pricing. If Tesla forms local partnerships, scales up sales, or starts production in India, costs could fall. Ongoing India–U.S. trade talks may also reduce tariffs on imported EVs. Together, these moves could make Tesla more affordable and boost electric vehicle adoption across the country.
Tesla
Tesla is finally entering India. After years of waiting, the electric-vehicle maker will open its first showroom in Mumbai in July 2025. A second showroom in New Delhi will follow soon after.
The showroom will be located in Bandra Kurla Complex (BKC), one of Mumbai’s key commercial areas near the airport. Tesla signed a five-year lease starting February 16, 2025, for about 4,003 sq ft. The first-year rent is roughly USD 446,000 (about ₹3.87 crore), with a 5% annual increase planned.
Model Y: China-Made and Pricey
Tesla plans to sell China-made Model Y electric SUVs at these showrooms. A small initial batch of five rear-wheel-drive units arrived in Mumbai, shipped from its Shanghai Gigafactory.
These vehicles cost them around ₹27.7 lakh (≈ USD 31,988). But with India’s steep import duties, each car attracts more than ₹21 lakh in tariffs. That tax rate is close to 70% for fully built vehicles under USD 40,000, plus additional cess.
Estimated Tesla Model Y Price in India
| Cost Item | Amount (₹ lakh) | USD Equivalent |
|---|---|---|
| Import Cost (China) | 27.7 | 31,988 |
| Import Duties | 21+ | — |
| Estimated Retail Price | 48–50+ | $56,000+ |
In comparison, the same Model Y is priced at USD 44,990 (USD 37,490 after credits) in the US.
Challenges: Price and Infrastructure
Tesla’s hefty pricing could be a barrier. Electric vehicles account for just over 5% of new car sales in India, and luxury EVs under 2%. This shows most Indian consumers prefer affordable cars. At roughly ₹50 lakh ($56k+), Tesla’s Model Y will serve a niche market.
Infrastructure is another issue. Tesla is working to build local support. This includes hiring staff for stores, charging, and policy roles and setting up warehousing in Karnataka and Gurugram. They’ve also posted job listings in India, with roles like store and service managers.
Timing, Tariffs, Tesla
Tesla’s move follows long delays. The big push began after Elon Musk met Prime Minister Narendra Modi in the U.S. in February 2025. This meeting likely helped in speeding up India’s plans to reduce tariffs on premium EVs above USD 35,000—from 110% to 15%—if local manufacturing is guaranteed.
Despite these efforts, fully built-up EVs from China still face steep tariffs. India is negotiating tariff reductions under a possible trade agreement with the U.S. .
Bold Moves, Swift Reactions
There’s been a recent leadership change at Tesla India. Prashanth Menon, head of Tesla India and a key figure in planning and setup, resigned. Now, the China team will lead India operations.
Local automakers are already nervous. Shares of Tata Motors, Mahindra & Mahindra, and Hyundai slid as Tesla edged closer to launching in India. Market analysts have mixed reactions: Citi praises Tesla’s tech edge, while CLSA highlights challenges with high pricing compared to local EVs.
Why It Matters
- Global Expansion: Tesla is expanding beyond China and Europe, seeking growth in emerging markets like India.
- Tech Leadership: Bringing advanced EV tech to India could raise standards and competition.
- Local Manufacturing Plans: Talks with the government hint at future Indian production, which could lower prices.
- Infrastructure Investment: Tesla is building a charging and retail network to support long-term growth.
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