TLDRs;
- Tesla faces weak Model Y sales in India despite high booking numbers and import volumes.
- Premium pricing and full import tariffs limit Tesla’s competitiveness against rivals like BMW and BYD.
- Limited EV financing options hinder adoption of high-priced imported vehicles in India.
- Discount offers are restricted, and local presence remains minimal, slowing sales momentum.
Tesla is encountering significant hurdles in selling its Model Y SUVs in India, and its stock (TSLA) slid almost 2% as investors reacted to slow sales. Sources cited by Bloomberg report that about 100 units remain unsold four months after their arrival in 2025.
Despite initial projections of 600 bookings, only 227 vehicles were officially registered, reflecting a sharp slowdown in buyer uptake.
Tesla, Inc., TSLA
The high price tag of nearly US$70,000 has made the Model Y less attractive in a competitive Indian EV market. Consumers are increasingly drawn to alternatives such as BMW’s iX1 and BYD’s Sealion 7, which offer lower costs and strong features. Tesla’s limited local presence, combined with a small network of showrooms, has further constrained its reach.
Pricing Strategy and Duty Implications
Tesla’s pricing approach hints that the company may have bypassed India’s March 2024 concessional import window, which allows a reduced duty of 15% for companies committing US$500 million to local manufacturing. Skipping this program means that Tesla pays full import tariffs, pushing the Model Y’s sticker price above comparable competitors.
“The pricing mismatch is clear,” said an industry analyst. “Consumers in India are sensitive to cost at this tier, and Tesla’s full-tariff imports make it hard to compete with vehicles like the iX1 or Sealion 7.”
Tesla’s decision to cancel Elon Musk’s scheduled visit to India in April further underscores the company’s cautious approach to local market engagement. Analysts suggest that without a significant local presence, inventory clearance will remain a challenge, even as limited discounts are offered to select customers.
Discount Offers Provide Limited Relief
To address lingering inventory, Tesla has introduced discounts of up to 200,000 rupees (around US$2,200) on certain Model Y variants. However, these offers are not available nationwide and target only a select group of buyers, limiting their effectiveness in boosting overall sales.
REPORT:
Tesla $TSLA has begun discounting unsold inventory in India after selling less than 300 Model Ys in the region in 2025. pic.twitter.com/FK78ZWnxzB
— LuxAlgo (@LuxAlgo) January 14, 2026
While the company continues to focus on showroom experiences for potential buyers, the combination of high prices and limited availability has hampered broader adoption. Market observers note that this contrasts sharply with competitors, who have leveraged local manufacturing and aggressive pricing to capture market share in India’s expanding EV sector.
Financing Challenges Affect Adoption
Another barrier for Tesla in India is the relatively thin EV financing landscape. Loan-to-value ratios are lower, interest rates higher, and eligibility rules stricter than for traditional internal combustion engine vehicles.
Fintech firms and non-banking financial companies (NBFCs) have started offering innovative solutions such as bundled leasing, charging subscriptions, and residual value guarantees. These options can reduce the cost of ownership at the US$70,000 price point, but uptake is still limited to affluent buyers.
Analysts believe that expanding access to financing could help Tesla move unsold inventory while appealing to premium customers. With EV leasing in India growing at a compound annual growth rate of nearly 35%, there is potential for fintech partnerships to play a larger role in clearing high-end imported models.
Tesla’s stock reaction reflects these headwinds, sliding almost 2% as investors assess the challenges in India’s premium EV market. While the company has made a name for itself globally, success in India may depend on balancing pricing, local engagement, and financing options to better compete with established rivals.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
