Tesla Cautious About India Entry Plans: 100% Tariff "Creates Anxiety" Among Buyers

Electric vehicle giant Tesla is continuing to eye its much-awaited India entry, but with caution. The unfavourable tax structure on imported cars sold in the country is still holding the EV giant back, according to its CFO, Vaibhav Taneja. In response to a question during the company's Q1 investors call on Tesla's impending India entry, Taneja said the brand has been working on getting into India, calling it “a very hard market.”

Tesla says its trying to figure out the right time for its India entry.

He added, “The current tariff structure with India is that any car which is sent there is subject to 70 per cent tariff, also there’s a 30 per cent luxury tax on it. So the same car that we’re sending is 100 per cent more expensive that what it is. So that creates a lot of anxiety, people feel they’re paying too much for the car. And by the way we’re not getting the money the local government is getting the money. That’s why we’ve been very careful trying to figure out when is the right time.”

“It would be great market to enter because India has a big middle class which we would like to tap in but these kind of things create a little bit of tension which we’re trying to work around”, he added.

Also Read: Tesla Model Y Facelift (Juniper) Spied Testing In India For The First Time

Tesla CEO Elon Musk has been vocal about high taxation imposed by India on imported cars and has cited that as the main reason for the brand’s delayed entry into our country. However a newly proposed government policy could see the duties on imported EVs be reduced to 15 per cent from the current 70 per cent if the concerned automaker plans to localise production in the future.

Also Read: Tesla Lists Openings In India For Sales, Services Staff; India Launch Soon?

Tesla delivered over 3,36,000 vehicles in the first quarter of 2025.

The company has been testing the facelifted Model Y in India in the last few weeks, and has also recently begun hiring staff in India, which is an indication that things might fall into place sooner rather than later. Media reports have also suggested that the brand has finalised the location for its first showroom in the country which is likely to be opened in the financial capital, Mumbai.