Tesla Launches Sales in India Amid Global Sales Decline

Tesla, Inc. has officially launched its sales operations in India, the world’s most populous country, marking a significant expansion for the electric vehicle (EV) manufacturer amid declining global sales figures. The opening of its first showroom in Mumbai on July 15, 2025, comes at a challenging time for the company, which is seeking to diversify its market presence and tap into the burgeoning middle class in India.

The Tesla Model Y, currently priced at approximately ₹61,07,190 (around $71,000), highlights the stark contrast in pricing compared to its costs in the United States. In the U.S., the Model Y is listed at approximately $45,000, with potential tax credits reducing the cost to about $37,500, according to Tesla’s official website. This pricing disparity raises concerns about the affordability of Tesla vehicles in India, particularly in a market sensitive to pricing.

Tesla has expressed its intention to enter the Indian market for several years, facing challenges primarily due to high tariffs on imported vehicles, which the World Trade Organization has noted can effectively double the cost of foreign cars. Vaibhav Taneja, Tesla's Chief Financial Officer, stated during an investor call in April 2025, "We’ve been working on getting into India. India is a very hot market... but the tariffs create a little bit of tension, which we’re trying to work around."

India ranks as the third-largest automotive market globally, trailing only China and the United States. However, Tesla's absence in this market has negatively impacted its overall sales performance, which has recently recorded the largest decline in the company’s history. This decline is attributed to increased competition not only from traditional automakers ramping up their EV offerings but also from emerging Chinese electric vehicle manufacturers.

The strategic move into India comes at a pivotal moment for Tesla, which has reported that nearly half of its sales revenue originates from the U.S., while over 20% is generated in China, with the remainder sourced from other regions. The current geopolitical climate, particularly the ongoing trade discussions between the U.S. and India, adds another layer of complexity to Tesla's expansion efforts. President Donald Trump announced two months prior that India had proposed eliminating tariffs on U.S. imports to prevent the imposition of steep tariffs on Indian exports to the United States, although Indian officials later clarified that no preliminary agreement had been established.

Tesla is also contending with internal challenges, including the departure of key personnel. Reports from the Wall Street Journal indicate that Troy Jones, Tesla's Vice President of Sales and Service, has left the company, a move that could hinder its operational capabilities at a critical time. Furthermore, although Tesla executives have mentioned plans for a manufacturing facility in India, existing plants in the U.S., China, and Germany currently exceed the demand for Tesla vehicles, leaving expansion plans uncertain.

In summary, Tesla's entry into the Indian automotive market represents a significant step in its global strategy, albeit fraught with challenges related to pricing, tariffs, and increased competition. The outcome of these efforts will be pivotal not only for Tesla's future sales trajectory but also for the broader landscape of the EV market in India as it continues to evolve.