Tesla India Inventory Piles Up as Buyers Cancel, Forcing $2,200 Discounts

Four months after Tesla’s celebrated India debut, nearly one-third of its imported Model Y inventory sits unsold in warehouse limbo. Bloomberg reports that roughly 100 of 300 imported vehicles remain without buyers, forcing the American automaker into the same discount playbook that’s become painfully familiar across Europe and China.

The India setback adds another chapter to what has become Tesla’s annus horribilis. The company’s worldwide sales fell for a second consecutive year in 2025, dropping behind BYD as the global EV sales leader. Now its much-anticipated entry into the world’s third-largest auto market is stumbling before it can properly begin.

• The Fact: Tesla is offering discounts of up to 200,000 rupees ($2,200) on Model Y Standard Range variants shipped last year
• The Reality: The discounts are being offered quietly to test-drive customers and existing reservation holders rather than as an official price cut, a tell-tale sign of desperation rather than strategy
• The Numbers: Tesla registered just 227 vehicles in India for all of 2025, compared to BYD’s 5,402 units (up 88% YoY) and BMW’s 3,753 EVs (up 200% YoY)

Why Did India Buyers Walk Away?

The Model Y starts at nearly $70,000 in India after the country’s brutal 110% import duties on vehicles costing more than $40,000. At that price point, Tesla isn’t competing with mass-market EVs. It’s competing directly with BMW, Mercedes-Benz, and established luxury brands that Indian consumers already know and trust.

The competition isn’t sitting still. BMW’s locally assembled iX1 Long Wheelbase has become the best-selling premium EV in India, helping the German automaker deliver 3,753 electric vehicles in 2025, a 200% jump from the prior year. BYD’s Sealion 7 SUV, which starts at around $56,000, offers comparable features at a substantially lower price than Tesla’s Model Y.

Bloomberg’s sources reveal that many buyers who initially placed deposits are now reluctant to complete purchases of the Standard Range Model Y, while deliveries of the more expensive Long Range variant have progressed more slowly than anticipated. Some prospective customers opted out entirely after test drives, choosing cheaper alternatives like BMW’s iX1 or BYD’s Sealion 7.

The Numbers Tell a Brutal Story

Tesla received approximately 600 bookings for the Model Y in India when reservations opened, a figure Bloomberg reported in September 2025. Four months later, the conversion rate from reservation to delivery has been dismal. Official vehicle registration data shows Tesla registered only 227 vehicles in India for all of 2025, highlighting the gap between early interest and actual purchases.

A Decade of Delays Yields a Rocky Start

Tesla spent nearly a decade weighing India entry before finally pulling the trigger. CEO Elon Musk met Indian Prime Minister Narendra Modi in the US in February 2025, apparently providing the catalyst for the long-delayed market launch. By July, Tesla had opened its first Experience Center in Mumbai and begun accepting orders. Deliveries from Tesla’s Shanghai Gigafactory arrived in early September.

The company originally planned to import up to 2,500 vehicles using India’s annual import quota. That number was reportedly scaled back dramatically after early demand signals fell short of expectations. Tesla shipped approximately 500 vehicles to India in 2025, and is now struggling to sell a substantial portion of that smaller batch.

To bolster its India operations, Tesla hired Sharad Agarwal, the former head of Lamborghini India, in November 2025 to lead local operations. The appointment signals Tesla’s recognition that selling $70,000 EVs in India requires a luxury-focused approach rather than the mass-market playbook that worked in the US and Europe.

EVXL’s Take

Tesla’s India struggles are symptomatic of a global crisis that has been building throughout 2025. When we covered Tesla’s European sales collapse in December, we documented a 38.8% annual decline while the broader EV market surged 27%. The same pattern is emerging in India: competitors are executing while Tesla relies on brand recognition that doesn’t carry the same weight it once did.

The $70,000 price tag isn’t just expensive by Indian standards; it’s expensive compared to what that money buys elsewhere in Tesla’s global markets. Chinese consumers can purchase the same Shanghai-built Model Y for roughly half the price. European buyers have dozens of competitive alternatives. Indian luxury car buyers have BMW, Mercedes, and increasingly BYD offering compelling options without the premium Tesla demands.

Six months from now, expect Tesla to either slash prices dramatically, potentially taking losses on every Indian sale, or effectively retreat from the market while claiming it was always a “test.” The company that once could dictate terms to buyers worldwide is now offering quiet discounts to move inventory in a market it spent a decade pursuing. That tells you everything about where Tesla stands in 2026.

Editorial Note: This article was researched and drafted with the assistance of AI to ensure technical accuracy and archive retrieval. All insights, industry analysis, and perspectives were provided exclusively by Haye Kesteloo and our other EVXL authors, editors, and YouTube partners to ensure the “Human-First” perspective our readers expect.