Model y priced twice as much as in china: Tesla Faces Setbacks in India with Timing and Pricing Miscalculations

In July, Tesla opened its first showroom in Mumbai, India, officially entering the Indian market. However, the high pricing of its Model Y has hindered its initial efforts. In India, the price for the rear-wheel drive version of the Model Y is about 499,000 RMB, while the Long Range rear-wheel drive version costs around 566,000 RMB. In comparison, the rear-wheel drive version in the Chinese market is priced at 263,500 RMB, making it nearly twice as expensive and the highest priced among major global markets.

The price difference is mainly due to India's high import tax of approximately 70% on vehicles, which poses challenges for Tesla even as it attempts to enter the market with a high-end positioning. From Tesla's pricing strategy, it is evident that the company has overlooked the characteristics of the Indian market. The Indian automobile market is largely composed of price-sensitive consumers, with the average price of passenger cars in India in 2024 being about 95,000 RMB, while the starting price of the Tesla Model Y is nearly 500,000 RMB. Such a stark price disparity makes it difficult for Tesla to reach the mainstream consumer group in India.

Even with a focus on the high-end market, India's high-end car market only accounts for 1% of total sales, and electric vehicles make up only about 10% of that. The small market space makes it difficult to support Tesla's sales expectations. Meanwhile, both domestic and other international brands have been deeply entrenched in the mid to low-end electric vehicle market for years. For example, Tata Motors holds over 60% of the Indian electric vehicle market share and continues to launch low-priced models. Tesla's high-priced entry lacks a corresponding differentiation advantage, making it difficult to attract Indian consumers.

In terms of timing, Tesla also made missteps. After first announcing plans to enter the Indian market in 2016, it took 9 years of setbacks before officially opening. This led to a gradual erosion of expectations among Indian consumers. Early reservations for the Model 3 resulted in customers waiting for years without being able to take delivery, and the refund process was fraught with difficulties. Tesla not only failed to offer any rewards to these loyal customers, but also did not invite them to participate in the store opening, leading to a decline in consumer goodwill.

Furthermore, Tesla's after-sales service and Supercharger network planning in India remain unclear. They have only planned to build 4 charging stations each in Delhi and Mumbai before the third quarter delivery, which cannot meet market demand. In contrast, competitors have already established a well-developed charging network and after-sales service system in the Indian market. The future sales outlook for the Tesla Model Y in India is extremely bleak. Currently, Tesla needs to rebuild consumer trust in order to facilitate its expansion into the Indian market.