Tesla Model Y arrives in India, but sticker shock may spoil the party
Tesla has officially begun delivering vehicles to private customers in India. The American car company handed over the keys to its first Model Y this week in Mumbai, celebrating the beginning of its retail operations in one of the world's largest and fastest-growing auto markets.
Unfortunately, the moment is shadowed by a price tag that turns the popular electric SUV into a luxury item far beyond the reach of the average buyer.
Siddharth Jain, an executive director at Inox Group, became the first private citizen to receive a Tesla in the country. He shared his excitement about his new Stealth Grey Model Y, a vehicle he said he had been waiting for since visiting the company's Fremont factory in 2017.
Technically, this was the second Tesla delivered in India - the first was a ceremonial handover to a government minister - but Jain's purchase represents the first time a paying customer has driven off with one. This delivery means Tesla's Indian operations are finally underway, following the launch of its first showroom in Mumbai's Bandra Kurla Complex in mid-July and a second store in New Delhi's main airport.
The excitement of the first delivery is tempered by the vehicle's cost. In India, the Tesla Model Y carries a starting price roughly double what a customer in the United States would pay. This isn't a simple case of corporate pricing strategy; it's a direct result of India's tax structure for imported goods.
The government currently imposes a painful 110% import duty on fully built vehicles that are priced over £29,000. Since Tesla imports the Indian-market Model Y directly from its factory in Shanghai, China, it cannot escape this massive tax.
This tax issue has been the central point of friction in Tesla's long and drawn-out entry into the Indian market. The Indian government is encouraging international car companies to build their products locally by offering lower taxes for domestically manufactured vehicles. This "Make in India" initiative is designed to boost local jobs and industry.
Tesla has so far declined the invitation. India's Minister of Heavy Industry confirmed earlier this year that the electric car maker has no immediate plans to establish a manufacturing plant in the country, creating a difficult situation for the brand. By importing its cars, Tesla has to pass the high tariff costs onto the consumer, which results in pricing its vehicles out of the mainstream market.
This business strategy puts its EVs in a niche category, competing with high-end luxury brands rather than the mass-market vehicles that are driving the global electric revolution. The result is a standoff: India wants local production, and Tesla, for now, is unwilling to commit.
The initial market response seems to reflect this pricing problem. Since opening the order books in July, Tesla has secured just over 1,000 orders. That number has grown a bit from an initial 600, but it is a modest figure in a nation of over 1.4 billion people. The slow start suggests that while the brand has a strong following among enthusiasts, the high price is a major barrier for broader adoption.
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