logo
Tesla finally parks in India. But can it survive the tariff war?

Tesla finally parks in India. But can it survive the tariff war?

Al Jazeera18-07-2025
New Delhi, India – Tesla is finally cruising in India, the world's third-largest car market, with the launch of its Model Y. The rollout marks the culmination of a decade-long, topsy-turvy journey.
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.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Elon Musk ‘sorry' after Starlink satellite internet suffers global outage
Elon Musk ‘sorry' after Starlink satellite internet suffers global outage

Al Jazeera

time3 days ago

  • Al Jazeera

Elon Musk ‘sorry' after Starlink satellite internet suffers global outage

SpaceX's Starlink satellite internet has suffered one of its biggest international outages, knocking tens of thousands of users offline, a rare disruption that prompted an apology from senior executives, including founder Elon Musk. Starlink, which has more than six million users across roughly 140 countries and territories, suffered the disruption on Thursday that lasted for about two hours and 30 minutes, according to Michael Nicolls, Starlink's vice president of Starlink Engineering, in a post on X. The outage was a rare hiccup for SpaceX's most commercially sensitive business that had experts speculating whether the service, known for its resilience and rapid growth, was beset by a glitch, a botched software update or even a cyberattack. Users began experiencing the outage at about 3pm on the United States' East Coast (19:00 GMT) on Thursday, according to Downdetector, a crowdsourced outage tracker that said as many as 61,000 user reports to the site were made. 'The outage was due to failure of key internal software services that operate the core network,' Nicolls explained in his post. 'We apologise for the temporary disruption in our service; we are deeply committed to providing a highly reliable network, and will fully root cause this issue and ensure it does not occur again,' he said. Musk also apologised: 'Sorry for the outage. SpaceX will remedy root cause to ensure it doesn't happen again,' the SpaceX CEO and founder wrote on X, which he also owns. SpaceX has launched more than 8,000 Starlink satellites since 2020, building a uniquely distributed network in low-Earth orbit that has attracted intense demand from militaries, transportation industries and consumers in rural areas with poor access to traditional, fibre-optic-based internet. Starlink has focused heavily in recent months on updating its network to accommodate demands for higher speed and bandwidth.

Tesla likely faces ‘few rough quarters' after US cuts for EV support
Tesla likely faces ‘few rough quarters' after US cuts for EV support

Qatar Tribune

time3 days ago

  • Qatar Tribune

Tesla likely faces ‘few rough quarters' after US cuts for EV support

Agencies Tesla boss Elon Musk said on Wednesday that cuts in support for electric vehicle makers by the U.S. government might lead to a 'few rough quarters' for the company before a wave of revenue from self-driving software and services begins late next year. Shares fell nearly 5% after Musk responded on a quarterly results conference call to questions about new U.S. government policies under President Donald Trump. Musk's electric vehicle maker posted the worst quarterly sales decline in more than a decade, along with a profit that missed Wall Street targets. However, its profit margin on making cars was better than many had feared. Musk is pursuing autonomous driving to power privately owned vehicles as well as robotaxis that it plans to put into production next year. In the meantime, it is working on a new, cheaper car, though CFO Vaibhav Taneja said that production would ramp up next quarter, slower than initially expected. It produced some initial units by the end of June. The company did not provide an update on its full-year deliveries forecast, citing the economy and timing of the new car rollout. 'Tesla's disappointing results aren't surprising given the rocky road it's traveled recently,' said eMarketer analyst Jacob Bourne. 'A truly affordable model will hit the bullseye in terms of boosting sales if Tesla can effectively position it right without detracting from its higher-priced models.' The second consecutive quarterly revenue drop, with a 12% decline, comes despite the launch of a refreshed version of its best-selling Model Y SUV, which investors had hoped would help revive demand.A 51% dive in sales of automotive regulatory credits, which other automakers who have difficulty complying with government emissions rules buy from Tesla, also hurt revenue and profit. Revenue fell to $22.5 billion for the April-June quarter from $25.50 billion a year earlier, slightly behind analyst targets compiled by LSEG. Adjusted profit per share of 40 cents lagged the Wall Street consensus. The automotive gross margin, excluding regulatory credits, was 14.96%, above Wall Street estimates, helped in part by lower costs per vehicle. Pricing and margins are important as Tesla wrestles with demand and faces falling government support. Tesla's global deliveries dropped 13.5% in the second quarter, and the U.S. government will later this year cut $7,500 tax credits for EV buyers. 'We probably could have a few rough quarters,' Musk said when asked about the credits. 'I'm not saying we will, but we could – you know, Q4, Q1, maybe Q2, but once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I think I'd be surprised if Tesla's economics are not very compelling.' Tesla had said in April that it would start producing the more affordable model by the end of the first half, and sources had told Reuters that the vehicle, a stripped-down version of its Model Y SUV, would be delayed by at least months. Tesla did not disclose any details of the model, including the number of units it had produced or its pricing, on Wednesday. Musk responded to a question of what the vehicle would look like by saying, 'It's just a Model Y,' joking that he 'let the cat out of the bag there.' Tesla's lineup is relatively old, despite a recent refresh of the flagship Model Y, and it faces rising competition from cheaper EVs, especially in China, and a persistent backlash against Musk's far-right political views. The company also said it continued to expect volume production of its custom-built robotaxi – called the Cybercab – and Semi-Truck in 2026. Much of the company's trillion-dollar valuation hangs on its bet on its robotaxi service – a small trial of which was started in Austin, Texas, last month with about a dozen Model Y SUVs – and on its development of humanoid robots. 'Autonomy is the story,' Musk said on the conference call, describing plans to roll out autonomous ride-hailing to about half of the U.S. population by the end of this year.

India, UK sign FTA with aim to enhance bilateral trade to $120 billion by 2030
India, UK sign FTA with aim to enhance bilateral trade to $120 billion by 2030

Qatar Tribune

time3 days ago

  • Qatar Tribune

India, UK sign FTA with aim to enhance bilateral trade to $120 billion by 2030

Agencies London In a historic step, the India-UK free trade agreement (FTA) was signed in the presence of Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer. The trade deal which was agreed upon in May this year, was signed on Thursday during PM Modi's visit to the United Kingdom. The agreement has been finalised with an aim to enhance bilateral trade to $120 billion by 2030, effectively doubling the current trade volume between both nations. The free trade agreement signed today will help in facilitating reduced tariffs on exports of labour-intensive goods including leather, footwear and clothing, whilst reducing import duties on British whisky and automobiles. The trade agreement was formalised with Indian Prime Minister Narendra Modi and British Prime Minister Keir Starmer in attendance, with Commerce and Industry Minister Piyush Goyal and British counterpart Jonathan Reynolds signing the document. The agreement requires the British Parliament's endorsement before implementation, a process anticipated to take approximately one year, according to a PTI report. The agreement ensures that 99 percent of exports from India would receive duty-free access to British markets. On a braid basis tariffs on UK's exports to India will come down from 15 percent to 3 percent, implying cheaper goods available for Indians. Such bilateral trade arrangements typically involve both doing away with or substantially lowering customs duties on the majority of traded goods. Additionally, they aim to simplify regulations in order to encourage service trade and mutual investments. India's agricultural industry is positioned to benefit in a big way. India's global agricultural exports stand at $36.63 billion, whilst the UK's total agricultural imports are $37.52 billion. However, UK's imports from India are merely $811 million. The British market presents lucrative opportunities for specialised Indian agricultural products, including tea, mangoes, grapes, spices and seafood items, amongst others. The India-UK FTA has sections addressing different aspects of trade; this includes goods, services, innovation, government procurement, and intellectual property rights. The FTA's key provisions include halving import duties on UK-produced whisky and gin from 150 percent to 75 percent to begin with, followed by a further decrease to 40 percent within a decade. Additionally, tariffs on automobiles will see a big reduction from over 100 percent to 10 percent. This is subject to quota restrictions. The agreement also aims to facilitate market access and cost-effective trade for businesses and Indian consumers via reduced import duties on various products. These include cosmetics, aerospace components, lamb, medical equipment, salmon, electrical machinery, soft drinks, chocolate and biscuits. The agreement will create export prospects for domestic sectors that employ substantial workforce, encompassing textiles, marine products, leather goods, footwear, sports equipment and toys, gems and jewellery, engineering products, automotive components and engines, alongside organic chemicals. The services component of the trade deal will facilitate the movement of diverse professionals, including independent professionals—such as yoga instructors, musicians, and chefs—business visitors, investors, contractual service suppliers, intra-corporate transferees, as well as their partners and dependent children who are granted the right to work. India and the UK have also finalised discussions on the Double Contribution Convention Agreement, which is also known as the social security agreement. This arrangement would mean that Indian professionals working temporarily in Britain will not have to make duplicate payments towards social security funds.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store