Tesla Opens First Showroom in India

Tesla has officially entered India’s booming electric vehicle (EV) market by launching its first showroom in Mumbai, India’s financial capital. The highly anticipated inauguration was led by Maharashtra Chief Minister Devendra Fadnavis, marking a milestone for Elon Musk’s EV company as it eyes fresh demand in Asia’s fastest-growing economy.

Tesla’s new Mumbai showroom signals a major milestone for India’s luxury EV market, but the real test will be whether Elon Musk commits to building cars in India. Without local manufacturing, Tesla’s role in India may remain symbolic in a young but rapidly growing electric vehicle industry.

For years, Tesla’s India entry was delayed due to the country’s steep import duties—previously between 70% and 100%—which made its high-end EVs unaffordable for most Indian buyers. Elon Musk has repeatedly called India a country with “more promise than any large nation” but also highlighted how high import taxes prevented Tesla from testing the market.

Tesla Model Y Debuts in India’s Luxury EV Market

Tesla’s India debut comes with its luxury $70,000 Model Y SUV, which places it firmly in the premium segment. The company will initially import cars from its Shanghai Gigafactory, with deliveries expected to begin in late August 2025. As a result, Tesla vehicles won’t qualify for India’s new lower import duty rate of 15%—which only applies to EVs under $35,000 if the company commits to local production within three years.

Despite India’s push for local manufacturing, Tesla has yet to announce plans for an Indian Gigafactory. Industry analysts expect Tesla to sell about 500–700 cars per month initially, with sales stabilizing at 200–300 units monthly—solid numbers for the luxury segment but a fraction of India’s total auto market.

India’s New EV Policy Aims to Attract Global Carmakers

In March 2025, India unveiled a new electric vehicle policy designed to boost EV adoption while encouraging local manufacturing. The updated rules reduced import taxes dramatically for affordable EVs but included conditions to drive local investment.

However, Tesla’s Model Y sits well above the $35,000 price cap for duty reductions. For now, the company is expected to cater only to affluent urban buyers in cities like Mumbai, Delhi, and Bangalore—competing more with luxury brands like BMW, Mercedes, and Audi than with India’s homegrown EV makers such as Tata Motors and Mahindra Electric.

Tesla’s India Entry Comes Amid Global Sales Slowdown

Tesla’s push into India comes at a critical time for the company globally. The EV pioneer is facing softening sales in the US and Europe due to rising competition from Chinese brands like BYD, which offer cheaper models. Amid a crowded global EV market, expanding into emerging economies like India gives Tesla a chance to diversify its revenue base.

Earlier this year, Elon Musk met privately with India’s Prime Minister Narendra Modi in Washington, fueling speculation about deeper trade and investment ties. While no new factory has been confirmed yet, industry insiders see the Mumbai showroom as Tesla’s first step toward eventually assembling EVs locally.

Tesla’s Next Challenge: Local Production

With India’s EV market accounting for just 3% of total car sales—around 100,000 units in 2024—Tesla’s high price point means its immediate reach will remain limited. For Tesla to truly capitalize on India’s potential, industry experts say local manufacturing is key. Without it, Tesla cars will continue to attract heavy import duties, restricting sales to a niche luxury segment.

Afsheen Gohar

Afsheen Gohar is a seasoned writer with a wealth of experience in crafting authentic and well-researched articles. Her dedication to delivering high-quality content is evident in her work, where she combines a passion for storytelling with a commitment to accuracy and depth. Afsheen’s writing reflects her ability to engage readers with compelling narratives while providing valuable insights on a diverse range of topics.