Tesla expects Indian consumers to save about Rs 20 lakh on the Model Y’s Rs 60 lakh ($67,221.24) price tag over the next 4 to 5 years, the company’s India General Manager, Sharad Agarwal, told Reuters on Wednesday.
With India being a price-sensitive market, the Elon Musk-led EV maker has sold 140 units in India this year since it opened bookings in mid-July.
Indian customers can save around 2 million rupees while buying a Model Y in terms of maintenance and petrol costs, Agarwal said. “Plus it has a high resale value. The cost of home charging is one-tenth of petrol prices,” he added.
Also read: Tesla opens first full-scale experience centre in India
Why is Tesla Model Y price high in India?
Import duties in India push the cost of Tesla’s entry-level Model Y above Rs 60 lakh, almost 3x higher than the average Rs 22 lakh price tag at which most other EVs are sold in the country. Compared to its prices in the United States, Tesla Model Y is priced about 70% higher than the cost of the car in the home country. Even with the government’s recent green push for the auto sector, electric vehicles remain a niche segment in India, accounting for just over 5% of overall car sales.
India has 100% import tariffs on cars, which Musk has called among the steepest in the world.
Out of all, just 2,800 EVs priced between Rs 45 lakh and Rs 70 lakh were sold in the first half of 2025, Bloomberg’s report said citing data from JATO Dynamics. This implies how tight the market is where Tesla is trying to take a seat as Chinese rival BYD has already had a better run, selling more than 1,200 units of its Sealion 7 SUV in the first six months of this year.
Tesla’s struggle in the Indian EV market is not only about pricing, a Bloomberg’s report underlined. The US-based automaker had pinned hopes on trade negotiations between India and US easing import tariffs, which in some cases can be as high as 110%. But prospects of a bilateral trade agreement have dimmed drastically after Trump imposed a 50% duty on Indian exports in retaliation for New Delhi’s oil trade with Russia.
Talks for an India-Europe free trade agreement, which might have allowed Tesla to import vehicles from its German factory at lower rates, have also stalled. The geopolitical landscape has shifted, leaving Tesla with fewer levers to reduce costs in India.
Ex-Lambhorghini head, Sharad Agarwal joins Tesla
Sharad Agarwal, who previously led Lamborghini India, is heading Gurugram operations for Tesla. He is tasked with reviving Tesla’s push in a market that has so far failed to deliver on the hype. Marking a shift in its approach to the market after a muted start to sales in the world’s most-populous nation, Agarwal will also be an on-the-ground leader for Tesla.
Tesla’s director for Southeast Asia, Isabel Fan, had overseen the launch of Tesla’s two Indian stores in Mumbai and New Delhi in July and August, respectively. Agarwal joins with a challenge to convert early curiosity into meaningful sales while navigating India’s protectionist tariffs and slow EV adoption curve.
India’s EV market dominance
Tesla has boldly entered a market currently dominated by Mercedes-Benz and BMW, which together account for nearly 80% of India’s luxury EV sales, including the BMW iX1, Mercedes EQA, Volvo EC40, Kia EV6, and BYD Sealion 7. Last month maked a record-high for India’s EV market, with overall passenger EV sales rising 57.5% year-on-year to 18,055 units, led by Tata Motors, JSW MG Motor, and Mahindra & Mahindra.
Several Indian automakers have cashed in on the growing EV opportunity with government subsidies. Hyundai Motor, Maruti Suzuki, and Kia are accelerating their EV strategies, while some of them plan to invest in EV charging infrastructure across India.
