Tesla finally parks in India. But can it survive the tariff war?
Showcased at its new showroom in Mumbai, India's financial capital, on Tuesday, Tesla's Model Y is now on sale for about $70,000, a price comparatively higher than in any other major market.
Elon Musk's electric vehicle (EV) company is braving high tariffs and stiff competition in India's nascent but rapidly expanding EV market.
As New Delhi negotiates a trade deal with the United States, India's car sector tariffs, arguably among the highest in the world, are a central topic.
'Tesla's entry into India marks a significant expansion of the company's global footprint,' said Kwan Wongwetsawat, a senior auto analyst at the research firm GlobalData. 'Before this decision, Tesla faced several market challenges,' he said, ranging from geopolitical concerns, a decline in global sales, and an uncertain launch schedule for a new compact model.
So, what's the buzz about Tesla coming to India? Can it leverage the developing Indian market? And can India give a shoulder to Musk's EV giant as its global sales plummet?
What is Tesla offering in India?
To start with, in India, Tesla has chosen to offer its Model Y in the mid-range luxury segment, combining its hallmark features: minimalist design, high performance, and long-range driving distance.
The driver-assistance technology is available as an add-on for 600,000 Indian rupees, or $7,000. Tesla is offering two variants of Model Y in India: the rear-wheel drive (RWD) and the long-range RWD edition. While the RWD has a range of up to 500 kilometres (310 miles) on a single charge, the long-range variant has a range of 622km (386 miles).
In the Indian market, the Model Y will go head-to-head with other premium electric SUVs, such as the Mercedes-Benz EQB, BMW iX1, Volvo EC40, and Kia EV6. Tesla offers a four-year, or 80,000km, vehicle warranty for the battery and drive unit, whichever comes first.
'Tesla is the biggest EV company in the world, and its entry in India is a big milestone for the national EV industry,' said Puneet Gupta, who leads the India and Southeast Asia teams at automotive intelligence firm S&P Global Mobility.
'It's not just about selling cars in India. But Tesla's entry can help India to build the EV ecosystem,' Gupta told Al Jazeera. 'And the biggest impact of a company like Tesla is that it boosts people's confidence in EVs as a category.'
The Model Y reaches a top speed of 201km/h (125mph), with six coloured exterior finishes. It is equipped with standard features such as automatic emergency braking, forward collision alerts, blind spot monitoring, and lane departure warnings. Tesla's signature Dashcam and Sentry Mode provide real-time recording and alerts for suspicious activity, even when the vehicle is parked.
Why is Tesla so expensive in India?
Tesla's Model Y rear-wheel drive is priced at 6 million Indian rupees, or $70,000, while the long-range RWD edition is priced at about 6.8 million Indian rupees, or just below $80,000.
Tesla's website does not provide the price breakdown, including delineating the additional import tariff costs and levies imposed by a state.
These prices for Model Y are higher than in any other major car market. They start at $44,990 in the United States, $36,700 in China, and $53,700 in Germany.
India currently imposes one of the highest import duty tariffs on fully built cars in the world, significantly shooting up prices of foreign vehicles, including EVs like those from Tesla.
Until recently, India imposed a 110 percent import duty on all fully built vehicles. The Indian government revised this policy, lowering the import duty to 15 percent for carmakers committing to invest and set up local manufacturing facilities within a three-year timeframe.
This steep tariff structure has been a point of contention for global carmakers like Tesla, which has long lobbied for a reduction in duties to test market viability before committing to local manufacturing.
US President Donald Trump has repeatedly criticised and called out India as a 'tariff king'. Both countries continue to negotiate a trade agreement, where the auto sector reportedly remains a central focus. Musk, Tesla's CEO, has also noted that 'import duties [in India] are the highest in the world by far of any large country!'
What is India's EV sector like?
India has set a national goal of achieving 30 percent EV adoption by 2030.
While electric car sales in India increased by 20 percent in 2024 from the year before, EVs still represented just 2.5 percent of the total 4.3 million passenger vehicles sold. Despite its relatively small base, the EV sector in India is projected to grow rapidly, from its current market value of $54.41bn to $111bn by 2029.
Currently, local manufacturers dominate the space, offering competitively priced EVs tailored to India's cost-conscious consumers. Tata leads with approximately 60 percent of the market share in the electric car segment, followed by JSW MG Motor India – a collaboration between India's JSW Group and China's SAIC Motor – and then Mahindra & Mahindra.
High-end electric cars, priced above $20,000, made up a minuscule 6.6 percent of total EV sales last year. This is where Tesla will have to compete with the likes of Mercedes-Benz, BMW, KIA and Audi.
How are Tesla sales faring in other markets?
Tesla is coming to India as its EV sales plunge in global markets, and as the company bets on its revised Model Y to turn its fortunes around.
In its home market, the US, sales continued to fall in the second quarter of 2025 by 6.3 percent, marking Tesla's third straight quarterly drop in year-over-year domestic sales.
Facing protests against Musk's politics and earlier involvement with the Trump administration, sales have fallen for five straight months in Europe. With some consumers switching to cheaper Chinese EVs, Tesla's market share has dropped to just 1.2 percent in May from 1.8 percent a year ago.
In China, Tesla's second-biggest market, the Q2 deliveries fell by nearly 12 percent.
'Tesla has been facing tough times globally, so the company also desperately wants new markets, and India, being the world's third-largest market, is a great opportunity for them to make up for some loss,' said Gupta of S&P Global Mobility.
In several countries, Tesla's Chinese competitors are outselling Musk's EVs. And that's where the vast Indian market comes into the equation for Tesla, noted experts.
Due to geopolitical tensions between India and China, rival Asian neighbours, only a few Chinese EVs are pitching to the Indian market. In 2023, the Indian government rejected BYD's proposal to establish a $1bn factory locally. While SAIC Motor operates in India in collaboration with India's JSW Group, BYD relies on importing multiple models.
'BYD is a direct competitor to Tesla, but the brand is also facing challenges in India and has yet to establish local production in the country,' said Wongwetsat. As a result, he added that both Tesla's prices in India and those of BYD are higher than in other markets. 'However, there is a clear price distinction between Tesla and local competitors like Tata, MG, and Mahindra,' placing Musk's company in the luxury segment.
Unlike other Chinese-dominated EV markets in Asia, India offers a rather open market for Tesla to introduce high-end features and build an ecosystem from the ground up.
'The Chinese companies are not comfortable investing in India, and even Indian consumers are not comfortable buying Chinese due to the uncertain geopolitical situation,' said Gupta.
'For now, the Indian market's positioning is a very good advantage for Tesla, where you really don't get competition from Chinese, which is really killing Tesla both in terms of price and features,' Gupta told Al Jazeera.
What challenges does Tesla face in India?
For starters, India, which has the world's biggest population, is a starkly unequal country, where 90 percent of the population does not have discretionary spending capacity. Tesla's base offering is priced at $70,000, where, on a national average, per capita income is $2,880.
Another concern is that India's infrastructure, including the condition of its roads and poor traffic discipline, could pose challenges for Tesla vehicles' lower ground clearance.
India has only one charging station for every 235 EVs, with a total of 26,367 public charging stations nationwide for its 1.46 billion people. In contrast, the US has more than 61,000 charging stations for its 330 million people.
At its media-only launch in Mumbai on Tuesday, Isabel Fan, Tesla's regional director, said, 'We are here to create the ecosystem, to invest in the necessary infrastructure, including the charging infrastructure.' Tesla announced that it will set up four charging stations in Mumbai. More will come to Delhi soon.
'We are building from 0 to 100. It will take time to cover the whole country,' Fan said.
Reading into the Indian EV market, Wongwetsat of GlobalData said that 'Tesla's arrival may not significantly impact overall battery electric vehicle (BEV) sales in India, but it could attract demand from consumers interested in luxury brands like BMW and Audi.'
Additionally, the launch of Tesla cars in India may be just one aspect of Tesla's broader ecosystem, Wongwetsat said, which includes sectors such as solar energy, energy storage systems, and even the space industry, all of which could enhance Tesla's appeal.
Will Tesla lose subsidies in the US?
Musk and the US president's apparent public fallout took a sharp turn earlier this month as Trump threatened to cut off billions in federal environmental subsidies that have benefitted Tesla and Musk's other companies.
The clash follows Musk's renewed criticism of Trump's tax and spending bill, which includes provisions to eliminate key clean energy incentives – specifically, the $7,500 consumer tax credit for electric vehicles that has long supported Tesla's market growth.
Trump, responding to Musk's criticism, warned that the Tesla CEO could 'lose a lot more' than just EV incentives. The dispute has broader implications. Musk has threatened to fund campaigns against lawmakers who back the bill and even floated the idea of launching a new political party.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Jazeera
15 hours ago
- Al Jazeera
Tesla reports biggest quarterly revenue decline in more than a decade
Tesla has reported its biggest decline in quarterly revenue in more than a decade as CEO Elon Musk's political activity weighs on the electric carmaker brand's reputation. Revenue fell to $22.5bn for the April-June quarter from $25.5bn a year earlier, according to its earnings report, which Tesla released after the closing bell on Wall Street. Analysts on average were expecting revenue of $22.74bn, according to data compiled by LSEG. Revenue from car sales declined by 16 percent. Tesla attributed the revenue dip to a decline in vehicle deliveries. Earlier this month, it reported a 14 percent decline in car deliveries in the second quarter. Investors are worried about whether Musk will be able to give enough time and attention to Tesla after he locked horns with United States President Donald Trump by forming a new political party this month. Weeks earlier, he had promised that he would cut back on government work and focus on his companies. Musk's connections to the Trump administration and layoffs across the US government when he headed the Department of Government Efficiency weighed on its US reputation. Meanwhile, the billionaire's endorsements of the far-right AfD party in Germany have affected the brand's reputation in Europe. A series of high-profile executive exits, including last month of a longtime Musk confidant who oversaw sales and manufacturing in North America and Europe, is also adding to the concerns. The company reported a second straight quarterly revenue drop, despite rolling out a much-awaited refreshed version of its best-selling Model Y SUV that investors had hoped would rekindle demand. Much of the company's trillion-dollar valuation hangs on its bet on its robotaxi service – a small trial of which started in Austin, Texas, last month – and developing humanoid robots. On Wednesday, Bloomberg News reported that Tesla has been in talks with the state of Nevada about introducing robotaxi services there. Analysts believe that this will keep the automaker on pace for growth in future quarters. 'We are at a 'positive crossroads' in the Tesla story: Musk is laser focused as CEO, Robotaxi/autonomous expansion has begun, demand stabilisation has begun especially in China, and Tesla is about to embark on an aggressive AI-focused strategy that, we believe, will include owning a significant piece of xAI,' Dan Ives, an analyst at the financial services company Wedbush Securities, said in a note provided to Al Jazeera. xAI is Musk's AI firm which also makes the chatbot Grok. 'While near-term and this quarter the numbers are nothing to write home about, we believe investors are instead focused on the AI future at Tesla, with a motivated Musk back driving Tesla's future,' Ives said. Tesla's stock closed the trading day in positive territory, up by 0.1, but has tumbled in after-hours trading, down by 0.3 percent.
Al Jazeera
3 days ago
- Al Jazeera
IMF says Gita Gopinath leaving at end of August to return to Harvard
Gita Gopinath, the No. 2 official at the International Monetary Fund (IMF), will leave her post at the end of August to return to Harvard University, the IMF has said. IMF Managing Director Kristalina Georgieva will name a successor to Gopinath in 'due course', the financial institution said in a statement on Monday. Gopinath joined the fund in 2019 as chief economist, the first woman to serve in that role, and was promoted to first deputy managing director in January 2022. No comment was immediately available from the United States Department of the Treasury, which manages the dominant US shareholding in the IMF. While European countries have traditionally chosen the IMF's managing director, the US Treasury has traditionally recommended candidates for the first deputy managing director role. Gopinath is an Indian-born US citizen. The timing of the move caught some IMF insiders by surprise, and appears to have been initiated by Gopinath. Gopinath, who had left Harvard to join the IMF, will return to the university as a professor of economics. Her departure will offer the US Treasury a chance to recommend a successor at a time when President Donald Trump is seeking to restructure the global economy and end longstanding US trade deficits with high tariffs on imports from nearly all countries. She will return to a university that has been in the Trump administration's crosshairs after the school rejected demands to change its governance, hiring and admissions practices. Georgieva said Gopinath joined the IMF as a highly respected academic and proved to be an 'exceptional intellectual leader' during her time, which included the pandemic and global shocks caused by Russia's invasion of Ukraine. 'Gita steered the Fund's analytical and policy work with clarity, striving for the highest standards of rigorous analysis at a complex time of high uncertainty and rapidly changing global economic environment,' Georgieva said. Gopinath has also overseen the fund's multilateral surveillance and analytical work on fiscal and monetary policy, debt and international trade. Gopinath said she was grateful for a 'once in a lifetime opportunity' to work at the IMF, thanking both Georgieva and the previous IMF chief, Christine Lagarde, who appointed her as chief economist. 'I now return to my roots in academia, where I look forward to continuing to push the research frontier in international finance and macroeconomics to address global challenges, and to training the next generation of economists,' she said in a statement.
Qatar Tribune
3 days ago
- Qatar Tribune
Meta, X and LinkedIn appeal against VAT claim by Italy
Agencies US tech giants Meta, X and LinkedIn have lodged an appeal against an unprecedented VAT claim by Italy that could influence tax policy across the 27-nation European Union, four sources with direct knowledge of the matter said on Monday. This is the first time that Italy has failed to reach a settlement agreement after bringing tax cases against tech companies, resulting in a fully-fledged judicial tax trial being launched. According to the sources, this came about because the case went beyond agreeing on a settlement figure and sought to establish a broader approach focused on how social networks provide access to their services. Italian tax authorities argue that free user registrations with X, LinkedIn and Meta platforms should be seen as taxable transactions as they imply the exchange of a membership account in return for a user's personal data. The issue is especially sensitive, given wider trade tensions between the EU and the administration of US President Donald Trump. Italy is claiming 887.6 million euros ($1.03 billion) from Meta, 12.5 million euros from X and around 140 million euros from LinkedIn. Meta, the parent company of Facebook and Instagram, Elon Musk's social network X and Microsoft's LinkedIn filed their appeals with a first instance tax court after mid-July, when the deadline for responding to a tax assessment notice issued by Italy's Revenue Agency in March passed. According to several experts consulted by Reuters, the Italian approach could affect almost all companies, from airlines to supermarkets to publishers. It could also eventually be extended across the EU where VAT is a harmonized tax. In a statement to Reuters, Meta said that it had cooperated 'fully with the authorities on our obligations under EU and local law'. It added that the company 'strongly disagrees with the idea that providing access to online platforms to users should be subject to VAT'. LinkedIn said it had 'nothing to share at this time'. X did not respond to a request for comment from Reuters. It is uncertain whether a full trial of the matter, which involves three levels of judgement and takes an average of 10 years, will go ahead. Following discussions with the three companies, Italy is preparing as a next step to seek an advisory opinion from the European Commission, the sources said. The Italian Revenue Agency will have to prepare specific questions, which the Economy Ministry will then send to the EU Commission's VAT Committee, which meets twice a year. Rome aims to submit its questions for the meeting scheduled to be held by early November, in order to receive the EU's comments in time for the following meeting in spring 2026. Italy's Economy Ministry and Revenue Agency declined to comment. The EU Commission's VAT Committee is an independent advisory group. While its assessment will be non-binding, a 'No' could prompt Italy to halt the case and ultimately drop the criminal investigation by Italian prosecutors, according to the sources. The dispute is one of several between Europeans and U.S. Big Tech. On July 11 Reuters exclusively reported that Meta would not be tweaking its pay-or-consent model further despite the risk of EU fines. According to a Financial Times report on July 17, the European Commission has stalled one of its investigations into Musk's platform X for breaching its digital transparency rules while it seeks to conclude trade talks with the US.
