Why Tesla Just Canceled Orders in India – You Need to Know!

Tesla India has begun contacting some of its earliest Model 3 reservation holders from 2016, notifying them that their bookings are being canceled as the company gears up for its long-awaited entry into the Indian market. This development, which marks a significant step in Tesla’s evolving strategy, has stirred both anticipation and reflection among Indian electric vehicle (EV) enthusiasts.

The news emerged through a post by Tesla Club India, a prominent community advocating for EVs in India, which shared an email sent to reservation holders. The email, addressed to individuals like one Ishant, expresses gratitude for their patience since the initial reservations nearly a decade ago. However, it also confirms that the original Model 3 they reserved has been discontinued as Tesla’s product lineup has evolved over the years. "The original Model 3 in your reservation was one of the products that have been replaced," the email explains. Tesla India is offering refunds for these reservations and has requested bank details to process the returns, directing customers to reach out at indiaorders@tesla.com for assistance.

Tesla Club India, known for its active engagement with the EV community, deserves credit for spotlighting this update. The group noted in its post, “Tesla India today contacted some of the 2016 Model 3 Reservation Holders and it seems like they will be cancelling their reservations.” The club also voiced hope that these early reservation holders would get priority when Tesla opens orders for India later in 2025, directly appealing to Tesla CEO Elon Musk for consideration.

This cancellation comes as Tesla intensifies its preparations to enter the Indian market, a move that has been in the works for years. The company has promised to reconnect with these patrons once it finalizes its product offerings for India, hinting at a potential launch later this year. Recent activities suggest Tesla is making significant progress toward this goal. The company has started hiring for various roles, including service technicians, advisors, and customer engagement managers, with positions available in Mumbai and New Delhi. This hiring push indicates Tesla is building a local team to support sales, service, and operations, catering to India’s growing demand for electric vehicles.

Adding to the momentum, Tesla CEO Elon Musk has engaged in high-level discussions with Indian leadership. On February 13, 2025, Musk met with Prime Minister Narendra Modi in Washington to discuss space, mobility, technology, and innovation. This was followed by a phone call on April 18, 2025, where they revisited these topics, emphasizing India’s potential for collaboration with the U.S. on technology. These interactions underscore Tesla’s strategic alignment with Indian government priorities, particularly in emerging technologies, and signal strong governmental support for Tesla’s entry.

Speculation is also rife that Tesla may establish manufacturing operations in India, a move that could be influenced by recent global trade dynamics. The U.S. recently imposed a 26% tariff on Indian goods, effective April 5, 2025, as part of a broader policy to address trade imbalances. This development, coupled with escalating trade tensions between the U.S. and China—where tariffs on Chinese goods have reached 145%—may push Tesla to diversify its manufacturing locations. India, with its lower labor costs and supportive EV policies, presents an attractive option. The Indian government’s EV policy allows automakers investing at least $500 million in local manufacturing to import 8,000 vehicles annually at a reduced 15% import duty, further incentivizing Tesla to set up production locally. Reports suggest Tesla is considering an investment of $3-5 billion to produce an affordable electric car priced at $25,000, potentially starting in 2025.

For now, the cancellation of the 2016 Model 3 reservations marks the end of a long wait for some Tesla fans in India, but it also sets the stage for the company’s next chapter in the country. As Tesla prepares to compete with established players like Tata Motors and Mahindra in India’s growing EV sector, the company’s focus on innovation and sustainability could reshape the automotive landscape.