Tesla’s much-awaited entry into the Indian electric vehicle market hasn’t quite taken off as expected. The American automaker has managed to secure approximately 600 pre-orders for its Model Y crossover since launching bookings in the country, with delivery schedules pointing to early September for the first batch of customers.
While 600 bookings might sound impressive at first glance, the reality paints a different picture for Tesla’s Indian ambitions. Internal company projections had anticipated filling their annual quota of 2,500 units relatively quickly, making the current numbers a significant underperformance. To put this in perspective, Tesla’s global operations typically see around 600 Model Y deliveries every four hours across their worldwide markets.
The root cause of this lukewarm response lies primarily in the vehicle’s pricing structure. Indian customers face a starting price of Rs 59.89 lakh (ex-showroom) for the Model Y, a figure that places it squarely in the luxury segment. This steep pricing stems largely from India’s hefty import duties on completely built units (CBUs), which significantly inflate the final cost compared to markets where Tesla manufactures locally.
The Indian government did introduce the SPMEPCI (Scheme for Promotion of Manufacturing of Electric Passenger Cars in India) policy in June, offering a more favorable 15% import duty for companies committed to local production. However, Tesla currently shows little interest in establishing manufacturing operations in India, effectively leaving them unable to benefit from this cost-reduction opportunity.
Market dynamics reveal another layer to this story. According to JATO Dynamics, the Indian luxury EV segment between Rs 45 lakh and Rs 70 lakh saw total sales of just over 2,800 units in the first half of 2025. Tesla’s booking figures, while modest, actually represent a meaningful share of this niche market segment.
The company’s booking numbers also reflect a disconnect between Tesla’s strong brand recognition and actual purchasing decisions. Despite generating considerable buzz and anticipation among Indian consumers, Tesla’s reluctance to invest heavily in local marketing campaigns may be contributing to the gap between interest and actual sales.
Tesla hasn’t completely written off the Indian market, though. The company continues expanding its infrastructure footprint through Supercharger installations in major cities like Mumbai and Delhi. Plans are also underway for opening a third experience center in South India next year, suggesting a long-term commitment despite current challenges.
From Tesla’s perspective, they’re likely expecting to fulfill delivery commitments for 350 to 500 units from the current booking pool, indicating that not all reservations may convert to actual purchases. This conversion rate aligns with typical patterns seen in emerging markets where high-value purchases often face last-minute cancellations due to financing or preference changes.
The broader implications extend beyond just Tesla’s performance. These figures highlight the ongoing challenges facing premium electric vehicle adoption in India, where price sensitivity remains a crucial factor even among affluent consumers. The success or struggle of Tesla’s Model Y could influence how other international EV manufacturers approach the Indian market in terms of pricing strategy and local investment decisions.
