Ambition meets reality: Tesla’s high-stakes gamble in India’s price-sensitive EV market

Abstract

This teaching case focuses on Tesla’s entry into the Indian electric vehicle (EV) market in July 2025, outlining strategic, regulatory, and competitive hurdles the company faced. Tesla launched the Model Y at around $70,000 (₹59.9 lakh) from a showroom in Mumbai’s Bandra-Kurla Complex and managed to retail a mere 225 units for entire calendar year, emphasizing a gap between brand vision and market reality. The case places Mr Sharath Agarwal, Tesla’s recently appointed India country head, at an important strategic crossroad: Should Tesla strengthen its premium differentiation strategy by increasing local manufacturing investment or follow a path towards retrenchment? Against the backdrop of India’s ambitious target for 30% EV penetration by 2030, policy frameworks such as Faster Adoption and Manufacturing of Electric Vehicles (FAME) and Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), entrenched competition from Tata Motors and Mahindra & Mahindra, and an embryonic charging infrastructure this case provides rich material to explore market entry strategy, behavioural strategy, competitive dynamics, and policy-industry interaction. It is intended for use in postgraduate courses on strategic management, international business, and technology management as well as in executive education.