Tesla Launches Model Y in India at 70,000 USD, Faces 100% Import Duties

Tesla has launched its Model Y in India with a price tag of approximately 70,000 USD, making it the most expensive in its primary markets. This move comes as the American automaker, which is currently facing a slowdown in sales, bets on the potential of the Indian market. The company's CEO has long criticized India's high import duties, which are a significant factor in the high pricing. Tesla aims to deliver the vehicles starting from the third quarter, targeting a niche segment of the electric vehicle market in India, which accounts for only 4% of the total sales in the world's third-largest automotive market.

Tesla opened its first showroom in Mumbai and began accepting orders for the Model Y on its website, marking its entry into a long-awaited market. The CEO had previously planned to set up a factory in Mumbai, but currently, Tesla is importing vehicles into a country where import duties and related taxes can exceed 100%, thereby increasing consumer prices. The Model Y vehicles on display in Mumbai are manufactured in China, as Tesla's U.S. factory does not produce right-hand drive vehicles for the Indian market. The rear-wheel-drive Model Y is priced at approximately 6000,000 Indian Rupees (70,000 USD), while the long-range rear-wheel-drive version is priced at 6800,000 Indian Rupees. In comparison, the starting price in the U.S. is 44,990 USD, in China it is 263,500 CNY (approximately 36,700 USD), and in Germany it is 45,970 EUR (approximately 53,700 USD). The company's Full Self-Driving (FSD) feature is available for an additional 600,000 Indian Rupees and promises future updates that will require minimal driver intervention.

Tesla has considered establishing a manufacturing base in India, a move encouraged by the Indian government to help the company avoid high import duties. However, as of now, Tesla has not committed to building a factory in India. The opening of the showroom is seen as a significant milestone in Tesla's operations in India. Since 2017, Tesla has been in negotiations with the Indian central government regarding tax exemptions and local manufacturing, but these talks have not yielded substantial progress.

The high import duties in India, ranging from 70% to 110%, pose a significant challenge for Tesla. For instance, a Model Y priced at 40,000 USD would face an import duty of 28,000 USD, driving up the final price. Tesla has also imported charging equipment and related components, further adding to the costs. The company's strategy in India appears to be more about establishing a presence and testing the market rather than focusing on immediate sales volumes. The high pricing reflects the current regulatory environment and the lack of local manufacturing, which could change if Tesla decides to invest in a production facility in the country.