Tesla is struggling to offload about a third of the initial electric cars it imported to India last year, as some prospective buyers who made early bookings have backed out, according to people familiar with the matter.
Sluggish demand has left roughly 100 vehicles in search of buyers four months after the Elon Musk-led firm shipped in a batch of about 300 Model Y SUVs, said the people, who didn’t want to identified because the information isn’t public. To clear out unsold stock, Tesla is offering discounts of as much as ₹2,00,000 on certain variants of the SUV, they said.
The discount offers apply to certain Model Y Standard Range vehicles shipped last year, and are only being offered directly to customers and test-drive seekers rather than as a formal nationwide promotion, the people said.
It’s an early sign of challenges as Tesla attempts to crack the world’s third-largest car market with one of its cheaper entry-level models. The carmaker, which debuted in India in July, was relying on its brand power to drive sales despite local levies touching 110% for imported cars.
Tesla Inc. didn’t respond to an emailed request for comment on discounts in India and the inventory buildup.
Tesla India sales
The tepid India debut comes at a time when the company is seeing faltering global demand. Its worldwide sales fell in 2025 for a second consecutive year, dropping the company behind China’s BYD Co. as the top-seller of EVs.
Increasing competition and waning subsidies in some markets have eroded Tesla’s share in the US, Europe and China. In India, car buyers have yet to fully embrace the brand, owing to limited visibility and high prices. The company hired former head of Lamborghini India, Sharad Agarwal, in November to lead its local operations to lure luxury-car buyers.
Some prospective customers opt out after test drives, choosing alternatives that are either cheaper, such as BMW’s entry-level luxury EV iX1, or come loaded with more features like BYD Co.’s Sealion 7. Both start with prices lower than Tesla’s Model Y in India.
Tesla as of now only sells the Model Y in India at a starting price of almost $70,000 ( ₹63 lakh), competing with established luxury-car makers in the country.
The EV maker received only about 600 bookings for the Model Y in India, Bloomberg reported in September. A significant portion of those orders have yet to be converted into deliveries, the people said. The company shipped as many as 500 cars to India last year, the first of which arrived from Shanghai in early September.
Tesla registered only 227 cars in the country for all of 2025, according to India’s official vehicle-registration data, highlighting the gap between early demand signals and actual sales.
Many buyers who initially placed deposits are now reluctant to complete purchases of the lower-priced and shorter-range Model Y, the people said. While other customers have shown interest in a more expensive longer-range variant, deliveries of that model also have progressed more slowly than anticipated, they said, contributing to the inventory buildup.
The company had weighed entering the Indian market for nearly a decade, finally deciding to do so a few months after Musk met Indian Prime Minister Narendra Modi in the US in February.
Tesla vs BMW vs BYD in India
Tesla’s slow start in India contrasts with relatively robust growth in India for some of its global competitors.
BMW AG’s Indian unit saw sales jump almost 200% last year to around 3,700 vehicles due to the locally assembled iX1 model, Hardeep Singh Brar, company’s India head, said in an interview this month.
The German carmaker, which sells its EVs at an average price close to the Model Y, is also increasing the proportion of its sales from electric models, Brar said.
China’s BYD has also gained market share by offering a broader range of price points and working with local partners. Registrations in India rose 88% to over 5,400 cars last year.