Tesla Begins Model Y Deliveries in India Amidst High Tariffs

The announcement of Tesla's entry into India was made by Grace Tao on September 27, 2025, highlighting the company's commitment to expanding its global presence. Tesla's Model Y, specifically the rear-wheel drive version, has been introduced at a price point of approximately 5.989 million rupees, equivalent to 69,000 USD. This pricing is notably higher than in other markets primarily due to India's 70% import tariff on electric vehicles. Despite these high prices, the launch is a strategic move for Tesla, as India stands as the world's third-largest automotive market.

Tesla's journey to enter the Indian market has been long and fraught with challenges. The company first expressed interest in selling its vehicles in India over nine years ago, in 2016. Since then, multiple negotiations and delays have occurred, but the opening of Tesla's first showroom in India earlier this year marked the beginning of a new chapter. The decision to import vehicles from the Shanghai Gigafactory, instead of establishing a local manufacturing facility, was made in light of the current economic and market conditions.

Tesla's entry into India is both timely and strategic. The company has faced declining sales in its established markets across Europe, China, and the United States during the first half of 2025. By tapping into the Indian market, Tesla aims to offset these declines and capture a share of the growing demand for electric vehicles in the region. However, challenges remain, as electric vehicle penetration in India is still below 5% of the total automotive market, and the luxury segment Tesla targets accounts for just 1% of vehicle sales.

To support its expansion, Tesla plans to open additional showrooms and charging stations across major Indian cities, including Delhi. These efforts are aimed at building a robust infrastructure to facilitate the adoption of electric vehicles. Moreover, the company is likely to focus on educating consumers about the benefits of electric mobility, particularly in a market that is still largely dominated by traditional internal combustion engine vehicles.

Looking ahead, Tesla's presence in India could serve as a catalyst for the broader adoption of electric vehicles. As the company navigates the complexities of the Indian market, its success could influence other automakers to consider similar moves. This, in turn, could accelerate the shift towards greener transportation solutions in one of the world's most populous countries. Tesla's journey in India is just beginning, and its progress will be closely watched by industry experts and competitors alike.