New Delhi: Tesla’s Model Y has finally .That’s nearly double what it costs in the US, where it starts at $37,490 (about ₹32 lakh).
For Indian buyers, it’s an eye-watering premium. Many expected the India-US trade corridor to play a role in softening prices. But it turns out that’s not the route this price cut might take.
The real twist? Any potential drop in pricing could be linked to Europe, not America. That’s right. India’s ongoing Free Trade Agreement (FTA) talks with the European Union might play a bigger role than any Trump-era tariff negotiations with the US.
Model Y in India isn’t from the US, it’s from Germany
The Model Y units displayed at Tesla’s new Mumbai showroom are not manufactured in the US. And that’s important. Tesla’s US factories don’t currently produce right-hand-drive (RHD) cars, which are necessary for Indian roads. Tesla’s China factory in Shanghai does export RHD units, but for the RHD markets like Australia and Japan.
Tesla began RHD production at Giga Berlin around April 2024, as per a Reuters report this was likely in preparation for export to India.
India-EU FTA talks could lead to lower tariffs
India currently charges over 100 percent import duty on fully built cars, which doubles the price of vehicles like the Model Y. But that could soon change. India is considering bringing down tariffs on EV imports from the EU to as low as 10 percent in a phased manner, according to a Reuters report citing officials and industry sources. This comes as part of India’s ongoing FTA negotiations with the European Union.
If the agreement is finalised, German-made cars like the Model Y and the VAG cars, Mercedes and more might see a steep price correction. Indian carmakers, however, are pushing back, asking the government to maintain at least 30 percent duties for the next four years to protect their turf.
So how much could the price drop?
Currently, the Model Y’s price in Germany starts at €44,990 (around ₹41 lakh) for the base model. The all-wheel-drive, seven-seater variant goes up to €57,490 (₹52 lakh), and the five-seater version with AWD is around €54,990 (₹50 lakh).
If the import duty falls to 10 percent under the EU FTA, buyers in India could expect a significant drop. Even a ₹10-15 lakh reduction could make a big difference for urban EV enthusiasts.
What about the superchargers?
Tesla also displayed its .The company will install them at seven locations in Mumbai and around Delhi, where it’s expected to open its next showroom. That means infrastructure is in the works, but the pricing battle is far from over.
India-EU trade numbers back this up
The EU is India’s largest goods trading partner. In FY 2023-24, the bilateral trade touched $137.41 billion (₹11.67 lakh crore), with Indian exports at $75.92 billion (₹6.45 lakh crore) and imports at $61.48 billion (₹5.23 lakh crore). This strong trade relationship adds weight to the idea that the EU FTA could influence Tesla’s pricing more than anything the US has on offer.