Tesla launches in India with pricey US$70,000 Model Y due to steep tariffs

MUMBAI: Tesla on Tuesday launched its Model Y at about $70,000 in India, the highest price among major markets, as the U.S. automaker grappling with slowing sales bets on prospects in a country CEO Elon Musk has long criticised for its high import tariffs.

AI Brief

Tesla launched in India with imported Model Y cars aimed at the luxury EV market, not mass-market players like Tata or Mahindra.
High import tariffs push prices up, but Tesla hopes future US-India trade talks may reduce duties.
Tesla showcased China-made cars in Mumbai; local manufacturing and R&D may follow later, says Maharashtra's chief minister.

With deliveries estimated to start from the third quarter, Tesla is targeting a niche electric vehicle segment in India that accounts for just 4% of overall sales in the world's third-largest car market.

It will compete mainly with German luxury giants such as BMW and Mercedes-Benz rather than domestic mass-market EV players such as Tata Motors and Mahindra.

Tesla opened its first showroom in Mumbai on Tuesday and began taking Model Y orders on its website, marking its long-awaited entry into the market where Musk once had plans to open a factory.

For now, Tesla will import cars into a country where tariffs and related duties can exceed 100%, driving up the price for consumers.

Grappling with excess capacity in global factories and declining sales, Tesla has adopted a strategy of selling imported vehicles in India, despite the duties and levies.

The U.S. EV maker has long lobbied India for lower import tariffs on cars, and Prime Minister Narendra Modi's officials remain in talks with U.S. President Donald Trump's administration to lower the levies under a bilateral trade deal.

But the cars Tesla displayed in Mumbai were made in China, and its U.S. factories do not currently make the right-hand drive vehicles that are used in India.

Tesla's Model Y rear-wheel drive is priced at about 6 million rupees ($70,000), while its Model Y long-range rear-wheel drive costs 6.8 million rupees.

That compares with a starting price from $44,990 in the United States, 263,500 yuan ($36,700) in China, and 45,970 euros ($53,700) in Germany.

The firm's Full Self-Driving (FSD) capability is on offer at an additional cost of 600,000 rupees, with future updates promised to enable operation with minimal driver intervention.

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.