Tesla offers big discount on Model Y after slow India response

Six months after the launch, Tesla, the renowned American electric vehicle manufacturer, is facing setbacks in India, with the number of unsold units of Model Y lying idle at the showrooms as bookings were reversed. It has been reported that the company is offering nearly Rs. 200,000 in discounts to clear nearly 100 unsold variants of SUVs. The company revved up its operations in the world's third-largest market in July 2025 with shipped units, as they rely on their brand despite local levies hitting 110% on imported cars.

The company had also appointed former head of Lamborghini India, Sharad Agarwal, as the head of India operations to boost sales. Tesla's muted debut in India comes as the company is decelerating from its prime time across the world, with poor sales pushing them behind China's BYD company and severe competition and reverting of subsidies decreasing their share value.

High prices and limited appeal slow sales

The company's strategy has yet to deliver results in India, with many car buyers still unsure about the value the brand offers. Limited visibility on the ground and premium pricing have slowed wider acceptance, even among the luxury customers Tesla is targeting.

The move was meant to attract high-end buyers, but early signs show that interest has yet to turn into actual purchases.

Buyers turn to rivals after test drives
Several potential customers have chosen not to proceed after test drives, opting for competing electric vehicles. Some have preferred options such as BMW's entry-level luxury EV, the iX1, while others have been drawn to feature-rich alternatives like BYD Co.'s Sealion 7. Both models are priced below Tesla's Model Y in India.

Tesla currently sells only the Model Y in the country, with a starting price of almost 70,000 dollars. This places it directly against well-established luxury car brands that already have a stronger local presence.

Selective discounts and inventory buildup
To clear older stock, Tesla has quietly offered discounts on certain Model Y Standard Range vehicles shipped last year. These offers are being extended only to select customers and those coming in for test drives, rather than through a nationwide promotional campaign, people familiar with the matter said.

Bloomberg reported in September that Tesla received around 600 bookings for the Model Y in India. A sizeable share of those orders has yet to be converted into deliveries, according to people who are aware of the situation. The company shipped up to 500 vehicles to India last year, with the first batch arriving from Shanghai in September.

Registrations fall short of expectations
Official vehicle registration data underlines the slow pace of sales. Tesla registered only 227 cars across India during 2025, highlighting the gap between early interest and actual deliveries.

Many customers who initially paid deposits are now hesitant to go ahead with purchases, and the longer-range and more expensive variants have moved more slowly than expected. This has added to inventory pressures.

Late entry contrasts with rivals' progress.
Tesla had evaluated the Indian market for nearly ten years before finally entering a few months after Elon Musk met Prime Minister Narendra Modi in the US in February. However, its measured start stands in contrast to the progress made by some global competitors.

BMW AG's Indian arm reported a sharp rise in sales last year, with volumes jumping nearly 200% to about 3,700 vehicles. The growth was driven largely by the locally assembled iX1, BMW India head Hardeep Singh Brar said in an interview this month. He added that electric vehicles are making up an increasing share of the company's overall sales, with average prices close to that of the Model Y.
China's BYD has also expanded steadily in India by offering electric cars across a wider range of price points and working with local partners. Vehicle registrations for BYD rose 88% last year to more than 5,400 units, according to official data.