Tesla posts ₹247 crore revenue in India, turns profitable in first year of car sales

Tesla’s Indian unit has reported a profit in its first financial year of selling vehicles in the country, offering an early sign that Elon Musk’s electric-car maker can build a viable business in a price-sensitive market. Regulatory filings show Tesla India Motors and Energy earned revenue of ₹247.31 crore and a net profit of ₹5.16 crore in FY26, according to filings reviewed by Moneycontrol.

The company’s revenue from operations rose almost 12 times from ₹20.83 crore in FY25, when its income came entirely from services. In FY26, vehicle sales generated ₹214.69 crore, or nearly 87% of total revenue, while services contributed ₹32.4 crore.

Net profit increased from ₹55.49 lakh in FY25 to ₹5.16 crore in FY26. Profit before tax rose to ₹7.3 crore from ₹0.5 crore, while operating profit climbed nearly five-fold to ₹13.7 crore.

MUST READ: How to buy the 'flying' Tesla Roadster? Reservations now open for Indian customers

Model Y Drives Growth

Tesla began retail operations in India after opening its first showroom in Mumbai in 2025. The Model Y accounted for the bulk of the company’s 1,782 registrations in FY26, according to vehicle registration data.

The company also expanded its local presence during the year. Tesla infused about ₹86 crore into its Indian unit in FY26, the filings showed, underlining the investment required to establish showrooms, service infrastructure and supply chains.

Tesla currently offers the Model Y and Model Y L in India. The five-seat Model Y starts at ₹50.89 lakh, ex-showroom, and offers a claimed range of up to 500 km. The three-row, six-seat Model Y L starts at ₹61.99 lakh and offers a claimed range of up to 681 km.

Heavy Spending On Expansion

Tesla India’s shift into vehicle retail also led to a sharp rise in spending on infrastructure and operations. Cash expenditure on property, plant and equipment and capital work-in-progress jumped to ₹62.54 crore in FY26 from ₹1.16 crore in the previous year, while cash and cash equivalents stood at ₹87.82 crore at the end of March, up from ₹10.28 crore.

The expansion also pushed operating costs higher. Employee benefit expenses more than tripled to ₹43.67 crore from ₹13.46 crore, including ₹11.99 crore in share-based compensation. Rent expenses surged to ₹30.32 crore from ₹2.64 crore, while advertising and promotion spending stood at ₹2.16 crore.

Profit Is Real, But Margins Narrow

While the headline numbers are positive, they also reveal the cost of moving from a services-led operation to an automaker. Tesla India’s operating margin narrowed to 5.5% in FY26 from 13.7% a year earlier, while gross margin fell sharply to 42% from 100%, reflecting the changed business mix.

In other words, the Indian entity is profitable, but vehicle sales have brought lower-margin revenue than the earlier services business. The profit is still small relative to Tesla’s global operations and the capital needed to grow in India.

DON'T MISS: Want to buy a Tesla in Noida? New experience centre brings Model Y cars closer to buyers

What It Means For India Plans

Registrations rose to 650 vehicles in April-September of FY27, exceeding the previous period’s total within six months, according to Moneycontrol.

The results confirm that Tesla has moved beyond a limited entry strategy and is generating revenue from actual car sales. But one profitable year does not settle the bigger question: whether the company can sustain profitability while expanding its footprint, localising operations and competing with established and emerging electric-vehicle players in India.