The revision follows the company’s sluggish debut in one of the world’s most value conscious automobile markets last year, with high prices deterring many potential buyers.
The timing of the price cut could however work in Tesla’s favour: with fuel prices rising sharply due to the Iran war, Indian consumers are becoming increasingly open to making the switch to electric.
Tesla Thursday launched the new Model Y Premium Rear-Wheel Drive (RWD) at Rs 50.89 lakh (ex-showroom), replacing the outgoing Model Y RWD that was priced at Rs 59.89 lakh. Tesla has also discontinued the Model Y Long Range RWD, which carried a sticker price of Rs 67.89 lakh. The rejig effectively lowers the entry point to Tesla ownership in India by Rs 9 lakh.
With the latest revision, the company’s India portfolio has now been streamlined to two variants — the newly introduced Model Y Premium RWD, and the Model Y L Premium AWD six-seater, launched earlier this year at Rs 61.99 lakh (ex-showroom).
The aggressive pricing is significant given that the Model Y is imported into India as a completely built unit (CBU) from Tesla’s Shanghai factory and attracts a 70% basic customs duty. Even then, the new Model Y Premium RWD is priced below key luxury EV competitors such as the BMW iX1 LWB, which starts at Rs 51.40 lakh, and the Mercedes-Benz CLA BEV, priced from Rs 55 lakh.
The move also reflects Tesla’s attempt to broaden its appeal in India’s premium car market, where buyers often face a sharp jump from mass-market vehicles priced around Rs 30-35 lakh to luxury offerings costing upwards of Rs 80 lakh. By repositioning the Model Y closer to the Rs 50 lakh mark and offering aggressive financing schemes, Tesla appears to be targeting a wider set of urban premium car buyers rather than only affluent early adopters.People familiar with the company’s strategy said Tesla is now trying to create clearer differentiation between its two India offerings — the five-seater Model Y Premium RWD for smaller families and the larger six-seater Model Y L for customers looking for additional space and utility.
The portfolio reshuffle comes as Tesla continues to build its presence in India after opening its first showroom in the country in July 2025. According to Federation of Automobile Dealers Associations (FADA) data, Tesla retailed 342 vehicles in FY26, including 43 units in April this year.
The company is also gradually expanding its retail and charging footprint beyond Mumbai and Delhi, with Bengaluru recently added and Hyderabad expected to be among the next markets.