Tesla for India or India for Tesla? Breaking down the ingredients for EV dish
3 months ago | 12 Views
It is that time of the year again when reports of Tesla accelerating its India progress take centerstage in the country's automotive landscape. The most-recent developments pertain to the Elon Musk-led company apparently sending a team of officials to hunt for a factory site a report suggests the company has already begun manufacturing electric cars for the Indian market from its plant in Germany. Some say it is a cat and mouse game. Others claim an electric vehicle (EV) revolution is about to begin. But mostly, it is about the hard dynamics of sheer business.
Negotiations between Tesla and the Indian government have been on for years. The EV giant has been asking for lower import rates on vehicles. The government wants commitment on local sourcing, local assembly and manufacturing, and on investments in the country. CEO Musk even met Prime Minister Narendra Modi on two separate occasions - once at the company's California factory and the second time in New York. “I am a fan of PM Modi," he would announce to reporters later.
He may be a fan but Musk is also a businessman. And an eccentric businessman at that. Industry watchers say Tesla is well aware that EV markets around the world are batting with lower intensity than previously predicted. A few even point out that a majority of people who have purchased EVs so far - Tesla or from any other brand - are enthusiasts and affluent customers. A 2022 report in The New York Times highlights that from here on, the masses who may be out for new car purchases would be far more circumspect than the initial adopters. So, what's the point?
Tesla takes aim at world's third-largest vehicle market
India overtook Japan as the world's third-largest vehicle market. It is now only behind China and the United States although the gap is quite sizeable. The potential is enormous even if the challenges are daunting. A diverse market like India is not easy to conquer. And several American automobile brands - from Ford and GM to Harley-Davidson - have failed miserably.
But as a country which saw 4.2 million or 42 lakh cars being dispatched in the last financial year, India also cannot be ignored by a company like Tesla which eventually wants to manufacture 20 million or two crore vehicles each year across the world by 2030, up from around 1.8 million or 18 lakh deliveries in all of 2023. Ambitious much? Maybe. India in sight? Likely.
![Model 3 is the most affordable Tesla EV anywhere in the world. Model 3 is the most affordable Tesla EV anywhere in the world.](https://images.hindustantimes.com/auto/img/2023/03/20/600x338/model_3_red_1611376044742_1611376050837_1679305880875_1679305880875.jpg)
To play the volume game, Tesla cannot just bank on its existing strongholds of China, the US and select European markets. There is an overall acceptance that markets like India and those in South-East Asia and Latin America are fertile play-fields. And more affordable models would be the key, something Musk has said on record.
It is likely that in India at least, Tesla would bring in only the Model 3, its most-affordable product in the lineup. An even more affordable Tesla - one that does not exist at present - could follow later. But what is certain is that Tesla just cannot either ignore the Indian market or bring anything less than its A game here. After all, news agency PTI did point to a report by Customized Energy Solutions, an energy advisory, software and services firm, which predicts EV sales to grow at Compound Annual Growth Rate (CAGR) of 35 per cent.
India may be ready for world's largest EV player
Several governments - local and national - in many parts of the world have almost salivated at the prospects of welcoming Tesla. In 2020, Reuters reported Brazil is working on a plan to attract Tesla investments in the country. In 2023, French Finance Minister Bruno Le Maire confirmed Tesla entry into his country would be a big leg up for French EV ambitions. And bizarrely, the city of Tulsa in Oklahoma even redesigned and repainted a state monument to make it resemble Musk in order to woo Tesla.
Such instances - serious and frivolous - are numerous.
![File photo: A Tesla Model S owner opens the hood of his EV in front of the Golden Driller. an iconic Golden Driller statue in Tulsa in Oklahoma. File photo: A Tesla Model S owner opens the hood of his EV in front of the Golden Driller. an iconic Golden Driller statue in Tulsa in Oklahoma.](https://images.hindustantimes.com/auto/img/2020/05/23/600x338/bdd184d3fd2a4129927cf7a145a104ff-6d6d8ca7c1574b95adf05fc9edc86d52-0_1590208260186_1590208270349.jpg)