Tesla warns Delhi EV subsidy cap blocks its premium models

Tesla told the Delhi government its draft Electric Vehicle policy would block the company's models from incentives, a person familiar with the matter said. The draft EV Policy 2.0 offers road tax and registration fee exemptions for electric cars priced at ₹30 lakh or less. Tesla's Model Y starts at ₹50.89 lakh for the five-seat version. The longer six-seat variant costs ₹61.99 lakh.

The company entered India in mid-2025. It currently sells both versions in the domestic market. Tesla's representatives, including external consultants, submitted feedback to the Delhi government arguing that the price cap will discourage buyers from purchasing high-tech EVs in a market that is still forming, the person said.

"Tesla believes that exclusion of their models from the proposed incentive scheme will be deterrent to those willing to purchase these cars in the Delhi-NCR markets," the person told businessline. Tesla runs an Experience Centre in Aerocity, Delhi, and a large service center in Gurugram.

Delhi is one of India's biggest car markets. Diesel vehicles older than 10 years are banned in the city, pushing consumers toward petrol, CNG, and electric options. Tesla sold 342 cars in its first full fiscal year through March 2026. It delivered 43 units in April and 35 in May.

The draft policy, covering 2026 to 2030, is under public consultation. It grants 100% exemption from road tax and registration fees for EVs priced at or below ₹30 lakh. Cars above that cap receive no exemption. The policy also offers a ₹1 lakh scrapping incentive for trading in a BS-IV or older Delhi-registered car, limited to the first one lakh applicants and capped at an ex-factory price of ₹30 lakh.

Tesla's pushback adds pressure as the Delhi government considers finalizing the rules. Comments on the draft are still being accepted. Queries sent to Tesla India went unanswered.