Electric car giant Tesla is reportedly planning to set up a facility in India to make electric vehicles (EVs) for the domestic and export markets but for it to gain market share in India, the company will have to make the country a hub for its upcoming budget car Model 2.
If it does so, and considering its huge brand reputation as the best EV maker in the world, Tesla could see considerable sales in the Indian and emerging (export) markets.
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| Tesla Model 2 is likely to be a hatchback. |
Tesla may change India’s EV landscape
According to a source close to the development, it is believed that the electric car giant has agreed to come up with a factory in India and manufacture electric vehicles locally.
This move could be a game-changing one for the Indian EV market, which till now sees minuscule electric vehicle sales compared to petrol and diesel vehicles.
Musk’s firm did not discuss tax issue
It is also believed that Elon Musk’s car firm did not discuss any tax issue —that is — lowering import taxes on EVs with Indian authorities.
This (tax issue) was the reason why Tesla had earlier shelved its plan to sell EVs in the Indian market.
Tesla team in India
There is buzz that a team of Tesla executives are in India this week to meet central government representatives and will take up issues such as local sourcing of parts, among others.
Nearly a year back, Tesla had backtracked from its plans to sell cars in India after it failed to get assurances on lower import taxes.
Indian taxes, according to Tesla chief executive officer (CEO) Musk, were among the highest in the world.
This (high import duty) has made Tesla cars extremely costly in India and is seen as a roadblock by the company.
Tesla’s fresh move a win-win
But Tesla’s revised plan on local manufacturing and sourcing of parts could be a game changer and make it a contender to reckon with in the Indian EV space.
If the American giant’s plan works out, it will be a win-win for both India as well as Tesla. This comes as the country aims at becoming the global hub for EVs while Tesla looks to expand beyond China.
Gadkari on Tesla
India’s Union road transport minister Nitin Gadkari had recently said that Tesla is welcome but will have to manufacture cars in India and not bring them as completely-knocked down (CKD) units for getting tax benefits.
Also, about a month and half ago, Tesla boss Musk had started following Indian Prime Minister Narendra Modi on Twitter and this gave rise to speculation that Tesla may be looking to make an entry into India.
E-Vroooom’s views
If Tesla can succeed in setting up a factory in India to make EVs, it is likely to whittle down the prices substantially — even of its high-end electric vehicles.
This way, Tesla may soon climb the ladder in India’s EV space faster than other automobile giants.
And, it is highly likely that Tesla may make India its upcoming budget car Model 2’s manufacturing hub for the global market, and initially, sell this EV in emerging markets such as Southeast Asia, besides India.
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