Tesla appears to be recalibrating its India strategy after slower-than-expected demand for the Model Y, with the company now offering quiet discounts on unsold inventory while simultaneously stepping up customer engagement through pop-up experiences in key cities.
High prices, hesitant buyers
According to people familiar with the matter, Tesla is struggling to sell nearly a third of the Model Y SUVs it imported into India last year. Of the approximately 300 units shipped into the country, around 100 vehicles remain unsold even four months after arrival. To move this inventory, Tesla is offering discounts of up to Rs 2 lakh on select Model Y Standard Range variants. These offers are not being advertised publicly and are instead being extended directly to prospective buyers and test-drive customers.
Tesla made its official India debut in July last year, positioning the Model Y as its entry offering despite steep import duties that push prices close to $66,000 (around Rs 60 lakh). The company was banking heavily on brand recall and early-adopter enthusiasm, even as imported EVs attract levies of up to 110 percent.
Bookings vs registrations gap
However, early demand has not translated into sustained sales momentum. Official registration data shows Tesla registered just 227 vehicles in India across all of 2025, highlighting a wide gap between initial interest and actual deliveries. While around 600 bookings were reportedly received initially, a significant portion of these have either been cancelled or are yet to convert into deliveries.
Buyers opting out after test drives appears to be a key issue. Many customers are reportedly choosing alternatives that are either more affordable or better equipped for the price. BMW’s locally assembled iX1 has emerged as a strong alternative, while BYD has gained traction with feature-rich offerings like the Sealion 7 at more competitive price points. Even within the luxury EV space, Tesla’s relatively sparse feature list and high pricing have made conversion difficult.
Bengaluru Pop-Up Experience
To address visibility and engagement challenges, Tesla has now begun experimenting with pop-up retail formats. Earlier this week, the company announced its first-ever pop-up experience in Bengaluru, a city where it does not yet have a permanent dealership. The pop-up, hosted at Kudlu Gate from January 15 to January 31, features four Model Y SUVs and offers guided walkarounds and scheduled test drives. Customers can book slots via Tesla’s India website, with test drives available between 10 am and 9 pm.
The Bengaluru pop-up appears to be a strategic move aimed at improving conversion in a high-potential EV market without committing to a full-scale showroom. Bengaluru remains one of India’s most EV-aware cities, with a large base of tech-savvy, high-income customers. The temporary format allows Tesla to build awareness, address buyer hesitation and potentially accelerate sales of existing inventory.
Global headwinds add pressure
Tesla’s India challenges also mirror its broader global situation. Worldwide deliveries declined for the second consecutive year in 2025, pushing the company behind BYD as the world’s largest EV seller. Slowing demand, rising competition and reduced subsidies in key markets such as the US, Europe and China have all impacted Tesla’s performance.
In contrast, some rivals are seeing strong growth in India. BMW reported nearly 200 percent growth in Indian EV sales last year, driven largely by the locally assembled iX1. BYD too has expanded steadily, with registrations rising 88 percent year-on-year to over 5,400 units, supported by a wider price spread and stronger feature packaging.
Tesla has also made leadership changes to strengthen its India operations, appointing former Lamborghini India head Sharad Agarwal to lead local business late last year. While the Model Y remains Tesla’s sole offering in the country for now, the company’s next steps—whether deeper localisation, expansion of retail touchpoints, or revised pricing strategies—will be critical in determining whether it can establish a sustainable presence in the world’s third-largest car market.
For now, the combination of targeted discounts and pop-up experiences suggests Tesla is actively adjusting course, attempting to convert early curiosity into actual sales rather than relying solely on brand pull.
