Tesla is grappling with unsold inventory in India, where about one-third of the Model Y vehicles imported last year remain unsold. Approximately 100 cars are still in stock, four months after the initial shipment of 300 units. To boost sales, Tesla is offering discounts of up to 200,000 rupees ($2,217) on certain models.

This inventory challenge comes as Tesla faces declining global demand, with worldwide sales dropping for the second consecutive year in 2025. Chinese competitors have once again overtaken Tesla as the top-selling electric vehicle manufacturer. Tesla entered the Indian market in July, banking on its brand recognition to drive sales despite local import taxes reaching 110% for foreign-made cars.

The company received around 600 bookings for the Model Y in India, but a significant portion of these reservations have not translated into actual deliveries. Tesla imported as many as 500 cars to India in 2025, with the first shipments arriving from Shanghai in early September. Priced at nearly $70,000, the Model Y competes with established luxury automakers in the country.

Market analysts suggest that Tesla's high pricing and the absence of a more affordable model are contributing factors to the slow sales. The company may need to reconsider its pricing strategy and explore local manufacturing options to enhance its market presence in India.