Tesla Q1 Earnings 2025: 'India’s a Tough Market' - Tesla CFO Cites 100% Tariff Wall

Tesla’s long-awaited entry into the Indian market continues to face delays, with the company citing steep import duties as a significant roadblock.

During Tesla’s Q1 2025 earnings call on Wednesday, Chief Financial Officer Vaibhav Taneja acknowledged the challenges, stating that while India is a “promising market,” the company is treading carefully due to the country’s restrictive tariff framework.

Also Read: Tesla India Operations To Begin Within 3–4 Months; May Allocate 10,000 Cars in Phase 1 – Details | Republic World

“We’ve been working on entering India, but it’s a very tough market,” Taneja said in response to an analyst’s question. “And I’m not just talking about tariffs — although they’re a big part of the issue — it’s the overall import structure that makes things difficult.”

According to Taneja, any Tesla vehicle sent to India would face a 70% import duty, followed by an additional 30% luxury tax. “That essentially doubles the price of our cars,” he explained. “And understandably, customers get anxious. They feel they’re paying far too much — and importantly, that extra money isn’t going to Tesla. It’s going straight to the local government.”

Tesla’s potential expansion into India comes after years of dialogue with the Indian government regarding investment conditions, duty relaxations, and the prospect of local manufacturing. At present, India levies import duties as high as 100% on fully assembled cars — a long-standing policy that has discouraged global EV makers from launching products without setting up manufacturing operations in the country.

“These high tariffs create hesitation among buyers,” Taneja said. “They feel like they’re being overcharged, and that’s why we’ve been cautious — we’re still figuring out the right time to make our move.”

He didn’t shy away from describing the Indian landscape as complex. “It’s not just the high tariffs — it’s the entire framework around imports that makes entry challenging,” he said. “We’re taking a measured approach. We’re working through it and assessing when the timing will be right.”

Despite the hurdles, Tesla is not backing out. Taneja reaffirmed the company’s long-term interest in India, especially given the country’s expanding middle class — a demographic that aligns well with Tesla’s ambitions. “India is a great market to enter,” he said. “But the current policy environment creates friction, and we’re trying to find a way around that.”

In parallel, Tesla is stepping up its engagement with Indian suppliers as part of a broader strategy to diversify its global supply chain. According to a recent report by Republic Business the Elon Musk-led EV giant plans to double its auto component sourcing from India to an estimated $4 billion in the current fiscal year — a clear sign that while market entry may take time, India remains firmly on Tesla’s strategic map.