Tesla Launches in India with Sky-High Prices

The wait is over. Tesla has finally launched in India.

The all-electric carmaker has officially opened up sales in the world’s third-largest auto market, hoping that a foothold in this fast-growing economy could help counteract the company’s recent global slump.

On Tesla’s newly launched India webpage, customers can now place orders. But the offering is limited: Tesla is only selling the Model Y SUV, available in two variants—Rear-Wheel Drive with a base price of ₹59,89,000 ($69,647) and Long-Range Rear-Wheel Drive priced at ₹67,89,000 ($78,950).

For comparison, the same Long-Range Model Y costs just $44,990 in the United States. That’s before applying the $7,500 federal EV tax credit available to eligible U.S. buyers, which can bring the effective price down to $37,490, less than half of what Tesla is charging in India.

That price tag is simply out of reach for most Indians. As of 2025, the average annual salary in India is approximately ₹3,58,000, or about $4,186, according to Payroll data. That means the base Model Y costs more than 17 times what an average Indian earns in a year.

The sticker shock raises tough questions: why is Tesla entering a price-sensitive market with a product that’s so clearly unaffordable for the vast majority of potential buyers? Tesla hopes a policy shift could change that.

“Tesla hopes that India’s current high automotive import tax of 70%-100% will be reduced to around 10% in the near future, which will enable them to not only lower the cost of the Model Y for the consumer, but also enable them to import cars from Giga Berlin instead of Giga Shanghai,” explained Sawyer Merritt, a Tesla investor and close watcher of the company, on X (formerly Twitter).

NEWS: Tesla has officially launched orders of the Model Y in India! The first ever Tesla car deliveries in the country will start this quarter (Q3 2025).

Starting prices:
• Model Y RWD: $69,700 (USD)
• Model Y LR RWD: $79,000 (USD)

FSD also costs $7,000 USD in India. Model Y… pic.twitter.com/t6c5UrfXwn

— Sawyer Merritt (@SawyerMerritt) July 15, 2025

The first deliveries are expected in the current third quarter.

Tesla CEO Elon Musk has long identified India—and its 1.46 billion citizens—as a strategic priority. In 2023, he called India more promising than any other country in the world but warned that sky-high tariffs had made entry impossible.

That’s now changing.

India has recently begun offering tax breaks on imported electric vehicles to foreign automakers that agree to build local factories and make significant domestic investments. But according to Indian media reports, Tesla currently has no concrete plans to build a factory in India. The Model Ys that are now for sale will be imported from Tesla’s Shanghai Gigafactory in China.

Meanwhile, Tesla’s global sales have taken a hit. In the second quarter of 2025, Tesla reported a 13.5% drop in global deliveries, part of a broader slowdown in the electric vehicle market as consumer demand cools in the U.S.

India’s electric vehicle market, while growing fast, remains small. In 2024, just over 100,000 EVs were sold in the country, representing less than 3% of total car sales.

Tesla’s launch in India also comes amid broader trade talks between India and the United States. With former President Donald Trump threatening steep new tariffs on countries like India, officials in New Delhi have been working to secure a bilateral trade agreement.

Last month, the Indian government also gave the green light for Musk’s Starlink satellite internet service to operate in the country, a move some analysts see as part of a broader economic opening to the Musk empire.