Tesla is offering steep discounts on its Model Y SUVs in India after initial sales fell short of expectations following the company’s entry into the market. The move signals challenges in penetrating a competitive and price-sensitive auto sector.
- Tesla is offering up to 15% discounts on Model Y SUVs in India, reducing prices from ₹59.9 lakh to ₹50.9 lakh ($74,000 to $62,500)
- Fewer than 800 Model Y units have been delivered in India since December 2025
- India’s 35% import duty on fully built EVs limits Tesla’s pricing competitiveness
- The company has installed 18 supercharging stations across Mumbai, New Delhi, and Bengaluru
- Tesla’s India expansion has delayed plans for local manufacturing, now projected for 2028
- Stock dropped 3.2% following the discount announcement, reflecting investor caution
Tesla has begun discounting its Model Y electric SUVs in India by up to 15% at its newly launched retail outlets, according to internal pricing data and dealership confirmations. The reductions follow the opening of the company’s first India showroom in Mumbai in December 2025, with a second location launched in New Delhi in January 2026. Despite significant marketing and infrastructure investment—including the installation of 18 supercharging stations across key urban centers—early sales volumes have remained below projections, with fewer than 800 units delivered in the first two months of operations. The Model Y was priced at ₹59.9 lakh ($74,000) at launch, but current offers are bringing the effective price down to ₹50.9 lakh ($62,500), targeting cost-conscious consumers in a market where local brands dominate. The slowdown comes amid rising competition from Indian EV makers like Tata Motors and Mahindra, which offer comparable vehicles at lower price points. Additionally, high import duties—35% on fully built vehicles—have limited Tesla’s ability to match local pricing. The price cuts reflect a broader strategic recalibration as Tesla faces slowing growth in mature markets like the U.S. and Europe. India, a market of over 1.4 billion people, remains a priority for long-term expansion. However, the current discounting suggests that demand has not materialized as quickly as anticipated, prompting a shift toward volume-driven sales tactics. Analysts note that sustained low demand could delay plans for local manufacturing, which Tesla has previously indicated could begin by 2028 if market conditions improve. The move affects not only Tesla’s local pricing strategy but also investor sentiment, with the company’s stock experiencing a 3.2% dip in early trading on the announcement. Retail partners and supercharging network operators are also reassessing their investment timelines. The outcome will hinge on whether price reductions can stimulate demand or merely erode margins without securing long-term market share.