Tesla Debuts First Indian Showroom, Unveils Model Y in the Nation
**Tesla Enters the Indian Market Amid High Import Taxes**
Tesla, the leading electric vehicle (EV) manufacturer, has officially entered the Indian market, marking a significant step for the company's global expansion. However, the high import taxes on EVs in India are causing the Model Y to be priced higher than in other markets.
The Model Y Rear Wheel Drive (RWD) deliveries in India are scheduled for Q3 2025, with the Long Range RWD following in Q4. The RWD model is priced at approximately $69,700 USD, and the Long Range RWD is priced at approximately $79,000 USD. These prices are on par with luxury brands like BMW and Mercedes, but the high import taxes make the Model Y significantly more expensive than in other countries.
India currently imposes a high import tax on EVs, ranging from 70% to 100% customs duty on fully built EVs. However, a new government initiative called the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) offers a path to reduce import duties to 15% for automakers who commit to local manufacturing and investment.
Under this scheme, automakers can import up to 8,000 EVs per year at the reduced customs duty, but they must invest ₹4,150 crore (about $500 million) towards local EV manufacturing in India. They must also start manufacturing operations within three years of approval, meet localization targets, and adhere to an overall duty reduction cap.
Tesla, so far, has shown no plans to manufacture EVs locally in India, which means it continues to pay the full import duties for selling EVs in the country. As a result, the Model Y prices are high compared to other markets.
Despite this, Tesla has opened its first showroom in India, located at the Maker Maxity mall in Mumbai's Bandra Kurla Complex. The showroom, a 4,000 sq. ft "Tesla Experience Centre," allows potential buyers to test drive vehicles and learn about the brand. Tesla is also planning to open several showrooms in India for wider expansion.
In addition to the Mumbai showroom, Tesla has committed to building a service and warehouse centre in Kurla West. The company already has a Pune engineering hub and Bengaluru office in India. Each new Model Y order includes a complimentary Tesla Wall Connector for home charging.
Tesla also offers Full Self-Driving for an additional $7,000 USD with every new Model Y order. Customers in India can place Model Y orders online, with support currently focused around Mumbai.
The launch of Tesla's showroom in India is amid ongoing discussions with the Indian government regarding automotive import taxes. Tesla hopes to lower import duties to around 10%, making the Model Y more affordable and allowing for imports from Giga Berlin (pending a favorable India-EU trade deal). Whether Tesla will eventually commit to local manufacturing in India remains to be seen.
References: [1] https://www.bloombergquint.com/business/tesla-to-start-orders-for-model-y-in-india-official [2] https://www.indiatoday.in/auto/story/tesla-model-y-price-india-100-lakh-rupees-bookings-open-july-2025-1966880-2022-07-06 [3] https://www.livemint.com/auto/news/tesla-is-not-interested-in-local-manufacturing-in-india-yet-officials-11657634734600.html [4] https://www.carandbike.com/news/tesla-model-y-pricing-india-56-lakh-official-launch-2022-07-06265547
- The high import taxes on electric vehicles (EVs) in India, such as those imposed on the Model Y, make it significantly more expensive than in other countries, including luxury brands like BMW and Mercedes.
- Tesla's preference for not manufacturing EVs locally in India, resulting from the high import taxes, means that the company continues to pay full customs duties for selling EVs in the country, which may affect the affordability of their vehicles in the Indian market.
