India eyes premium EVs - Musk sets sights on world's third-largest market
Illustrative photo: Elon Musk (Getty Images)
Tesla is launching its expansion into India with the opening of its first showroom in Mumbai, a key step for the company as it seeks new growth markets, according to Bloomberg.
Tesla Inc. is officially entering the Indian market with its Model Y crossover, starting with the launch of its first showroom in Mumbai. The new location is set within the upscale Bandra Kurla complex and spans over 370 square meters.
The expected pre-tax and insurance price of the Model Y in India exceeds $56,000, roughly $10,000 more than its base price in the US.
Focus on brand over volume
Despite the bold move, analysts don’t expect rapid sales growth for Tesla in India. Jay Kale of Elara Securities noted that the launch "doesn't make sense volume-wise" at this stage but could significantly boost Tesla’s brand image. India's EV infrastructure is still developing, and electric vehicles account for less than 5% of the country’s car fleet.
Competing with German luxury, not local giants
In India, Tesla will primarily compete with premium brands like BMW and Mercedes-Benz Group AG, rather than mass-market local players such as Tata Motors or Mahindra & Mahindra. Luxury vehicles currently make up just around 1% of total car sales in the country, making the Model Y more of a brand statement than a volume driver.
Musk's ambitious plans
Tesla plans to open a second showroom in New Delhi by the end of July. The company is also actively hiring local staff and leasing warehouse space. However, no plans for manufacturing facilities in India have been announced yet, something that could help reduce prices by avoiding high import tariffs.
Tesla’s debut in Mumbai comes during a challenging time: the company’s global sales dropped 13% in Q2 2025. Facing growing competition from China’s BYD Co., Tesla sees India as a potential growth market.
Outlook and political risks
India is currently negotiating a trade agreement with the United States that could lower EV import duties, a move Elon Musk has advocated for years. However, Musk’s strained relationship with US President Donald Trump could complicate Tesla’s lobbying efforts.
The Mumbai showroom launch is a strategic step aimed at building Tesla’s brand presence in India, rather than an immediate push into the mass market. Much like its approach in China, Tesla is creating early buzz while evaluating long-term investment opportunities in local production.
American billionaire Elon Musk recently announced the creation of his political party, positioning it in opposition to Trump’s Republican Party.
