Following its official retail launch in July 2025, Tesla is navigating a difficult initial phase in India, characterized by stagnant inventory and lower-than-projected conversion rates. Data indicates that approximately 100 units of the Model Y—representing one-third of the initial 300-unit import batch—remain unsold several months after arriving in the country.
Inventory Management and Pricing Adjustments
To address the accumulating stock, Tesla has initiated targeted price reductions to incentivize buyers. While the company has avoided public promotional campaigns, it is reportedly offering direct discounts of up to Rs. 2 lakh on specific Standard Range Model Y units. This move comes as the brand attempts to bridge the gap between its premium positioning and the expectations of Indian luxury car buyers.
Registration Data and Market Reception
While the brand initially garnered roughly 600 bookings, actual delivery figures tell a different story. Registration records for 2025 show only 227 Tesla vehicles were registered nationwide. Several factors contribute to this disparity:
- High Entry Cost: Import duties elevate the Model Y’s price to approximately $70,000, placing it in a highly competitive luxury bracket.
- Conversion Rates: A significant portion of early reservation holders opted not to finalize their purchases following test drives.
- Lack of Local Assembly: Unlike competitors, Tesla’s reliance on Completely Built Units (CBUs) limits its ability to compete on price.
The Competitive Landscape
Tesla’s entry coincides with a surge in performance from established luxury players and emerging EV specialists. BMW India reported a near 200 percent growth in EV sales during 2025, largely attributed to the locally assembled iX1. Similarly, BYD has successfully captured market share with the Sealion 7, which offers a robust feature set at a lower starting price than the Model Y. Both competitors benefit from more extensive service networks and localized manufacturing strategies.
Strategic Outlook
Under the leadership of Sharad Agarwal, formerly of Lamborghini India, Tesla is working to establish its presence from its Mumbai headquarters. However, the company faces the dual challenge of a global downturn in EV demand and the specific demands of the Indian market, where range, equipment levels, and value-for-money remain paramount. Without a shift toward local manufacturing or a broader product portfolio, Tesla’s short-term growth in the region remains under pressure.
