Tesla enters the Indian market with  costly $70,000 Model Y

Tesla will primarily rival German luxury brands like BMW and Mercedes-Benz, rather than local mass-market EV competitors like Tata Motors and Mahindra.

Tesla inaugurated its inaugural showroom in Mumbai on Tuesday and started accepting Model Y orders on its website, signaling its much-anticipated arrival in the market where Musk previously aimed to establish a factory. Currently, Tesla plans to bring vehicles into a nation where tariffs and associated fees can surpass 100%, increasing costs for buyers.

Facing overcapacity in its global factories and falling sales, Tesla has chosen to sell imported cars in India, even with the associated duties and taxes. On Tuesday, it introduced its Model Y priced at approximately $70,000 in India, the highest among major markets, while the U.S. carmaker, dealing with decreasing sales, places its hopes on the potential in a nation that CEO Elon Musk has frequently criticized for its elevated import tariffs.

Deliveries are projected to commence in the third quarter, with Tesla aiming at a specialized electric vehicle segment in India that represents only 4% of total sales in the world’s third-largest automotive market. The American EV manufacturer has persistently advocated for reduced import tariffs on vehicles in India, while officials from Prime Minister Narendra Modi’s government continue discussions with U.S. President Donald Trump’s administration to decrease the taxes through a bilateral trade agreement.

However, the vehicles Tesla showcased in Mumbai were produced in China, and its factories in the United States do not presently manufacture the right-hand drive cars utilized in India. The rear-wheel drive of Tesla’s Model Y is priced around 6 million rupees ($70,000), whereas the long-range rear-wheel drive Model Y is priced at 6.8 million rupees.

On Tuesday, police guarded Tesla’s Mumbai showroom as media crowded outside the office complex where it is located and the chief minister of the western state of Maharashtra, home to the Indian commercial capital, arrived for the launch.

“In the future we wish to see R&D and manufacturing done in India, and I am sure at an appropriate stage Tesla will think about it,” Maharashtra Chief Minister Devendra Fadnavis said.