Tesla Expands in India Despite High Tariffs and Market Challenges

Tesla launched its second showroom in India, opening in New Delhi just weeks after entering the market with its Model Y electric SUV.

The move comes at a tense time for U.S. brands in India, with some politicians and Prime Minister Narendra Modi’s supporters calling for boycotts in response to U.S. tariffs. While some prospective buyers say they will still purchase a Tesla, others argue Indian consumers should “show resistance” to American products.

India, now the world’s third-largest car market, has set a goal for electric vehicles to make up 30% of all car sales by 2030, up from just 2.5% in 2024. But challenges remain: price-conscious consumers, limited charging infrastructure, difficult road conditions, and steep import duties that can reach 110%. Those tariffs mean Tesla’s Model Y starts at around $70,000 in India, nearly double the U.S. price.

Tesla faces growing competition from other foreign entrants like Vietnam’s VinFast and China’s Leapmotor, as well as domestic leader Tata Motors, which currently dominates India’s EV sales.