Mumbai, India – Tesla's long-anticipated entry into the Indian market is reportedly losing its initial appeal among local enthusiasts, primarily due to the high price point of its imported models. As TechCrunch noted in a recent tweet, "Tesla loses its charm for India's loyalists — even as Musk finally delivers." This sentiment emerges despite the electric vehicle (EV) giant's cautious market entry strategy, which includes opening showrooms in major cities like Mumbai.
The primary hurdle for Tesla in India remains the cost of its vehicles, significantly inflated by the country's import duties. While India's new EV policy, introduced in March 2024, reduced import tariffs to 15% for vehicles priced over $35,000, this concession is contingent on a commitment to invest at least $500 million in local manufacturing within three years. Despite this, the Model Y, one of the first Tesla vehicles to arrive, is expected to start around ₹61 lakh (approximately $70,000), positioning it firmly in the luxury segment.
India's automotive market is highly price-sensitive, with the majority of consumers opting for more affordable vehicles. Domestic manufacturers such as Tata Motors, Mahindra, and Maruti Suzuki dominate the burgeoning EV sector with models like the Tata Nexon EV, priced significantly lower at ₹15-17 lakh. This stark price difference makes Tesla's offerings inaccessible to the broader market, limiting its potential customer base to a niche luxury segment.
The diminishing "charm" also stems from years of protracted negotiations and uncertainty surrounding Tesla's entry, which may have led to fatigue among early adopters. Furthermore, global challenges facing Tesla, including increased competition from rivals like China's BYD and a reported decline in consumer interest and market share globally, are likely influencing perception in India. The recent departure of Tesla's India chief, Prashanth Menon, in May 2025, leaving oversight to the China team, also raises questions about dedicated local leadership and strategy.
Tesla's current strategy involves testing the market with completely built units (CBUs) before committing to local production, a stance that has been a point of contention with the Indian government. The limited charging infrastructure in India compared to more established EV markets further compounds the challenges. For Tesla to truly capture the Indian market beyond a select few, a more localized and price-competitive strategy, potentially through domestic manufacturing, appears crucial.