Tesla’s India Debut: Mumbai Showroom Opens July 15 Amid High Tariffs and Luxury Market Buzz

Tesla is finally planting its flag in India, with its first-ever showroom set to open on July 15, 2025, in Mumbai’s upscale Bandra Kurla Complex (BKC). This marks a significant milestone for the electric vehicle giant, led by CEO Elon Musk, as it steps into the world’s third-largest car market. The 4,000-square-foot “experience centre” at Jio World Drive will let Indian consumers get up close with Tesla’s cutting-edge electric vehicles, starting with the popular Model Y. However, the launch comes with challenges, as high import tariffs and a strategic shift away from local manufacturing plans shape Tesla’s cautious entry.

The move follows years of speculation and stalled plans, with Tesla navigating India’s steep import duties, which can reach up to 110% on electric vehicles. Despite earlier discussions in 2025 between Musk and Prime Minister Narendra Modi to ease these barriers, Tesla has opted to import vehicles rather than invest in local production for now. Customs data reveals the company has already shipped nearly $1 million worth of vehicles, Superchargers, and accessories from China and the United States, including six Model Y units priced between $32,500 and $46,000. These imports face hefty tariffs, pushing the on-road price of a Model Y well above Rs 46 lakh, positioning Tesla squarely in India’s growing luxury car segment.

India’s luxury car market, which saw 43,000 units sold in 2023 according to Statista, is heating up, with competitors like Mercedes-Benz reporting a 10% sales surge in Q1 2025. Tesla’s direct-to-consumer model, bypassing traditional dealerships, aims to capitalize on this demand. The BKC showroom, located near premium brands like Apple, will offer a sleek space for customers to explore variants and pricing, though test drives and deliveries may not start immediately. Tesla is also laying groundwork with a service centre in Kurla West, an engineering hub in Pune, and a registered office in Bengaluru, signaling a long-term commitment despite the absence of local manufacturing plans.

High tariffs remain a sticking point. India’s recent EV policy offers reduced duties of 15% for companies investing $500 million in local production, but Union Minister H.D. Kumaraswamy noted Tesla’s current focus is on sales, not manufacturing. This decision comes as Tesla grapples with global challenges, including a 13.5% drop in Q2 2025 deliveries and excess production capacity. By importing vehicles, Tesla is testing India’s appetite for premium EVs, but the high costs could limit its reach beyond affluent buyers.

The competitive landscape is another hurdle. Alongside Mercedes-Benz, brands like Audi and Hyundai are making waves in India’s EV and luxury markets. Tata Motors, a dominant player in India’s EV space, and Mahindra are also ramping up their electric offerings, intensifying competition. Tesla’s brand power and technological edge may attract early adopters, but mainstream adoption could hinge on future policy changes or local production.

As Tesla rolls out its Mumbai showroom, it’s betting on India’s growing appetite for luxury and sustainability. The launch event, initially exclusive to VIPs and media, will open to the public the following week, with deliveries expected by late August. A second showroom in Delhi’s Aerocity is also in the works, hinting at broader ambitions. For now, Tesla’s India journey is a bold step into a complex market, balancing high costs with high expectations.