Tesla’s long-anticipated India entry this week comes at a critical moment in its history. For a company once heralded as the unchallenged champion of electric vehicles (EVs), its struggles today run deeper than declining sales figures. They point to a brand that is losing its lustre, an organisation in flux, and a CEO whose distractions are becoming liabilities.
Tesla will inaugurate its first Indian showroom at Mumbai’s Bandra Kurla Complex on July 15, calling it an “experience centre” to entice a market it long courted but never committed to. Five Model Ys have landed for display and test drives, while a Delhi showroom is expected by month-end. But even as the world’s most valuable EV maker finally plants its flag in India, the market debut is revealing: Tesla will reportedly be importing cars at a starting price of Rs 65-70 lakh, nearly double the US sticker price due to India’s steep 70% import duty.
The company has no confirmed plans to manufacture locally despite Prime Minister Modi’s repeated overtures. That decision underlines Tesla’s current challenge: it is testing markets without investing deeply, seeking short-term sales when long-term presence is what it needs most.
A Company in Decline
While Tesla’s India launch is being spun as bold expansion, it is happening against a grim backdrop. Global deliveries fell 13% in each of the first two quarters this year. In Europe, registrations plunged 37% even as the region’s EV market grew 28%. In the US, Tesla’s EV market share has collapsed from over 75% in 2022 to under 50% today. In China, its shipments from the Shanghai factory declined year-on-year for eight consecutive months before a small uptick in June.
These are not normal cyclical dips. They signal a fundamental loss of momentum. Rivals like BYD are storming ahead with cheaper, more varied models and rapid battery innovation. Xiaomi secured almost 300,000 pre-orders within an hour for its YU7 SUV, undercutting Tesla’s Model Y by nearly $10,000.
Tesla’s product pipeline, meanwhile, has stagnated. Its promise of a sub-$30,000 mass-market EV remains unfulfilled nearly two decades after Musk first outlined it. The Cybertruck, launched with fanfare last year, has fallen far short of expected volumes.
The Political Cloud Over Musk
Beyond the numbers lies an even greater vulnerability: Elon Musk himself. Once the visionary driving Tesla’s narrative, his political entanglements are now undermining its commercial future. The company’s shares fell 6.8% this week after Musk announced he was forming a new political party to counter US President Donald Trump’s latest tax and spending bill. For a man once Trump’s key donor and efficiency czar, the public fallout is stark.
Tesla’s board has been urged by analysts like Dan Ives to set ground rules limiting Musk’s political adventures at a time when the company is at a “tipping point.” His distractions come just as Tesla faces the expiration of the $7,500 federal EV tax credit and the removal of regulatory penalties for emissions, ending a $10 billion revenue stream from selling credits to automakers. Without those credits, Tesla would have posted net losses this year.
Investors are tired of the drama. Hundreds of protests have erupted at Tesla showrooms globally in recent months, driven by consumer backlash against Musk’s political stands. In the past, losses on one side of the political spectrum were partially offset by gains on the other. Today, Musk’s public feuds are alienating both.
The Robotaxi Gamble
Musk’s counter-narrative is that Tesla’s future lies not in cars but in AI, robotics, and autonomy. He has hyped the robotaxi service, but its launch in Austin was underwhelming. Vehicles required Tesla employees in the passenger seat to monitor performance, while videos surfaced of robotaxis driving on the wrong side of the road or nearly hitting parked cars. Waymo, its chief competitor, is already operating in multiple US cities with plans to expand to Miami and Washington DC in 2026.
Musk also touts humanoid robots as Tesla’s next growth pillar. But these remain prototypes with no clear commercial path, leading many investors to fear that the company is betting on untested futures while its core car business atrophies.
Why India Matters Now
This is why Tesla’s India launch is not just another market expansion but an existential pivot. It needs to prove to shareholders and customers that its brand retains allure, its technology remains aspirational, and its growth story isn’t over. India, with its fast-growing EV market and untapped luxury segment, offers Tesla an opportunity to arrest its decline.
Yet its current strategy may backfire. By importing cars rather than manufacturing locally, Tesla risks positioning itself as a niche, unaffordable brand in a market that prizes value as much as prestige. Indian rivals like Tata and Mahindra have made EVs accessible, while BYD’s pricing is competitive. Tesla’s Rs 65-70 lakh starting price limits its appeal to a narrow band of affluent buyers.
Moreover, India’s road conditions, charging infrastructure, and regulatory environment pose challenges that Tesla has not fully addressed. Building service centres, scaling up supply chains, and adapting vehicles to local conditions will require deep commitment, not just an “experience centre” in Mumbai.
The Road Ahead
Tesla’s current troubles are a lesson in hubris and the limits of brand equity. Its fall from unchallenged leadership in EVs to fighting for market share against nimble Chinese players is striking. Its reliance on regulatory credits to stay profitable underlines its vulnerability. And its CEO’s political theatrics are alienating customers in every major market.
India is not a guaranteed panacea. For Tesla to reclaim its growth story, it must build vehicles Indians can afford, invest in manufacturing and infrastructure, and re-establish itself as a company driven by innovation rather than spectacle. Otherwise, its India entry risks being a symbolic win that masks a deeper strategic retreat.
As Tesla opens its showroom in Mumbai this week, it marks not just the arrival of a brand in India but the test of its relevance in a world it once defined. Whether Musk has the focus – or Tesla the agility – to pass this test remains the most urgent question for its investors and customers alike.
