By Tesla Inc.’s entry into India, one of the world’s fastest-growing auto markets, has turned out to be slower than anticipated.
Since opening sales in mid-July, the electric vehicle maker has received just over 600 confirmed orders, according to people familiar with the matter.
The number, which falls far below Tesla’s initial hopes, highlights the difficulties of expanding into a price-sensitive market while dealing with high import tariffs and strained trade relations.
For context, Tesla delivers more than 600 cars globally every four hours, underscoring how small the scale of its India debut is compared to its global output.
Orders and delivery targets in 2025
Tesla is now planning to ship between 350 and 500 cars to India this year. The first batch will come from its Shanghai factory and is scheduled to arrive in early September. Deliveries will begin in four major cities: Mumbai, Delhi, Pune, and Gurugram.
The shipment size is directly tied to the number of full payments received by Tesla. At present, the company’s operations are limited to locations where it has a physical presence, but plans to expand beyond these hubs could depend on future demand.
Tesla had originally aimed to use the full 2,500-car annual import quota for 2025, as reported earlier, but current figures suggest this target will not be reached.
Prices and tariffs weigh on demand
One of the biggest barriers is cost. Due to India’s high import tariffs—some as high as 110%—Tesla’s entry-level model is priced at more than 6 million rupees ($68,000).
By comparison, most EV sales in India occur at around 2.2 million rupees, according to data from auto intelligence firm JATO Dynamics. This pricing effectively restricts Tesla’s Model Y to a niche segment of wealthy consumers.
In the first half of 2025, just over 2,800 electric vehicles priced between 4.5 million and 7 million rupees were sold in India, JATO data shows. Tesla’s current sales figures, while disappointing compared to its global scale, fit within the size of India’s luxury EV market.
Global headwinds and trade friction
Tesla’s India results come at a time when the company is under pressure in its largest markets. Sales fell 13% last quarter in both China and the US, raising the risk of a second consecutive year of decline.
The carmaker had hoped India would ease import duties through trade talks with the US, allowing Tesla to lower its prices.
Instead, negotiations stalled after Donald Trump, now serving as US President, imposed 50% tariffs on Indian exports in retaliation for India’s continued purchase of Russian oil. This move has made it unlikely that Tesla will gain tariff relief any time soon.
Another potential channel, an India-Europe free trade agreement, would have allowed Tesla to import vehicles from its German plant at reduced duty rates. However, that deal remains under negotiation.
Competition and future expansion
Tesla’s cautious approach contrasts with Chinese rival BYD Co., which sold more than 1,200 Sealion 7 SUVs in India during the first half of 2025, despite facing the same import tariffs.
The BYD model is priced from around 4.9 million rupees, making it slightly more accessible to the high-end EV buyer.
Despite the slower-than-expected start, Tesla is still moving ahead with plans to establish a stronger presence in India. The company has already installed Superchargers in Mumbai and Delhi and is preparing to open a third experience centre in South India in 2026.
While crowds have visited Tesla’s showrooms, foot traffic has not converted into the scale of sales the brand expected.
The company’s strategy of relying on brand recognition and limited advertising, which works in markets such as the US and Europe, faces greater challenges in India where automakers invest heavily in marketing campaigns.
For Tesla, the next phase will depend on whether its premium pricing can sustain steady growth in a market still dominated by affordable cars.
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