Tesla is offering discounts on unsold Model Y vehicles in India as sales slow following the automaker’s long-awaited entry into the country, according to a report by Bloomberg.
The automaker is offering price reductions of up to 200,000 rupees ($2,200) on unsold Model Y sport utility vehicles imported into India, the report said. Tesla is estimated to have shipped around 300 vehicles into the country, but roughly a third remain unsold after some early reservation holders cancelled their orders.
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Tesla officially launched in India last year after years of negotiations with the government over import duties and local manufacturing requirements. Rather than joining a government-backed scheme that would have reduced tariffs in exchange for a commitment to build vehicles locally, Tesla chose to import fully built cars, exposing them to import duties of up to 110%.
As a result, the Model Y entered the Indian market at close to $70,000, a price point that limited its appeal in one of the world’s most price-sensitive major auto markets. Early demand was weaker than expected, with reports indicating Tesla received about 600 orders nationwide, far below volumes typically targeted for a large-scale market launch.
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Sales momentum has remained subdued. Industry estimates previously indicated Tesla sold only around 100 vehicles in the months following its debut, despite strong brand recognition and growing interest in electric vehicles among urban Indian consumers.
The discounts are being applied to inventory from Tesla’s initial import batch, underscoring the challenges the company faces in India without local production. Automakers operating assembly plants in the country benefit from significantly lower duties and pricing flexibility, allowing them to compete more effectively in the fast-growing EV segment.