Tesla Offers Discounts on Unsold Model Y in India After Slow Sales

Tesla is providing discounts on unsold Model Y inventory in India as the American electric vehicle (EV) manufacturer encounters a "letdown" in the major automotive market following its official launch last year. Tech billionaire Elon Musk-owned EV pioneer's attempts to enter the Indian automotive market have spanned several years, marked by a narrative of lobbying for reduced import duties, speculation about a local factory, and shelved plans.

The situation finally shifted last year when Tesla officially launched in the country, though experts noted at the time that it did so at a price that "didn't make sense."

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Rather than capitalising on a new government scheme that would have reduced import tariffs in exchange for a commitment to local manufacturing, Tesla opted to proceed independently, importing all vehicles. This resulted in the Model Y starting at nearly $70,000 (approximately ₹58 lakh) in India due to import duties as high as 110 per cent.

Discounts Introduced to Clear Inventory

According to a new report from Bloomberg, the automaker is already providing discounts to clear inventory. The report indicates that Tesla is offering discounts of up to ₹200,000 (approximately $2,200 USD) on unsold Model Y SUVs.

Substantial Inventory Remains Unsold

The report claims that Tesla imported about 300 vehicles to India, but roughly 100 of them remain unsold after early reservation holders cancelled their orders. This is in line with previous reports that Tesla received just 600 orders for the vehicle in the massive market, a figure that fell short of even modest expectations.

Sales Below Expectations

Sales have been extremely slow. Reports in November indicated that Tesla had sold only about 100 cars in the months following its launch. The discounts are reportedly being offered on the unsold inventory from that initial batch of imports.

Industry experts noted it was obvious this situation would develop, as selling a car that costs $40,000 in the US for $70,000 in India whilst expecting high volume was unrealistic. The addressable market at that price point in India is microscopic.