Tesla’s Entry into India and the Rise of Fractional Ownership
Tesla made a significant entry into the Indian market this week with the opening of its first showroom in Mumbai. The brand launched the Model Y, which comes with a price tag of $70,000. On the first day, the showroom witnessed a large number of visitors, including potential buyers from different parts of the country and curious onlookers eager to see the electric vehicle up close.
To secure a booking, customers are required to pay an initial deposit of Rs 22,000, followed by an additional down payment of about Rs 3 lakh within a week. However, the high price has proven to be a challenge for many Tesla enthusiasts. In response, social media has started exploring alternative solutions, one of which is fractional ownership.
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Understanding Fractional Ownership
A post on LinkedIn gained attention when a user explained that Tesla vehicles could be purchased through a concept called ‘fractional ownership.’ This means that multiple Indian buyers could own 8.33% of a single Tesla car, allowing each owner to use the vehicle for 30 days per year.
Rupal Madhup, the LinkedIn user who shared the idea, described how it works. According to her, buying a ticket for between ₹5–6 lakh grants 8.33% ownership of the car. This ownership allows the buyer to use the vehicle for 30 days annually over five years. After the five-year period, the car would be sold, and the owner would receive approximately Rs 2 lakh to Rs 3 lakh as a resale share.
Madhup highlighted that the concept was introduced during the launch event of the Tesla Experience Centre in Mumbai, where she met a representative from Prorata, a fractional car ownership platform.
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Tesla’s Market Position and Challenges
Deliveries of Tesla cars are expected to start in the third quarter of 2025. The company aims to target a niche segment of the electric vehicle market in India, which currently accounts for just 4% of overall sales. This market is dominated by luxury brands such as BMW, Mercedes-Benz, and Kia, rather than domestic players like Tata Motors and Mahindra.
Elon Musk’s company faces stiff competition due to the high tariffs and duties that make the Model Y significantly more expensive in India compared to the US. For instance, the same car that sells for around $35,000 in the US costs between Rs 60 to Rs 70 lakh in India. These high prices make Tesla less accessible for most Indian consumers looking for their first car or an electric vehicle.
Why Is Tesla So Expensive in India?
The Model Y rear-wheel drive is priced at about Rs 6 million ($70,000), while the long-range version costs Rs 6.8 million. These prices include import duties and other levies imposed by the state, although there is no clear breakdown provided. One of the main reasons for the high cost is the extremely high import duties on fully built imported cars (CBUs) in India, which often range between 60% and 100% of the car’s value.
Tesla has been lobbying the Indian government to reduce these import tariffs. Discussions are ongoing between Indian and American officials as part of a bilateral trade deal. Additionally, Tesla’s US factories do not currently produce right-hand drive vehicles, which are necessary for the Indian market. The company also offers Full Self-Driving capability at an extra cost of 600,000 rupees, but it requires active driver supervision, and the current features do not make the vehicle fully autonomous.
