In this news, we discuss the Long road for Tesla in India with infrastructure and supply chain issues
NEW DELHI (Reuters) – Tesla Inc is gearing up for a launch in India, but the U.S. automaker is likely to remain a niche player for years to come, catering only to the wealthy and affluent in the world’s second most populous country.
India’s burgeoning electric vehicle (EV) market accounted for just 5,000 cars out of a total of 2.4 million cars sold in the country last year. A lack of local production of components and batteries, negligible charging infrastructure, and the high cost of electric vehicles mean that there have been few price-conscious takers in the market.
It’s also difficult to see how Tesla’s sought-after and expensive autonomous driving features will perform on India’s congested roads.
Ammar Master, a forecaster at consultancy LMC Automotive, said he expects Tesla to sell only 50 to 100 of its Model 3 electric sedans each year in India, at least for the first five years.
“As a country, India is still not so environmentally conscious to pay so much premium,” Mr. Master said.
“It always depends on the price. There will be wealthy people like movie stars and senior business executives who will review it for brand value. But then, how many buyers are there? “
The world’s most valuable automaker registered a local business in India earlier this month, a step towards its entry into the country, which is expected to take place as early as mid-2021.
Tesla plans to import and sell the Model 3 in India for around $ 65,000 to $ 75,000, about double the price in the US market, people familiar with the plans said.
This means it will be competing in the even smaller luxury electric vehicle segment in India, which has recently started to garner interest from Jaguar Land Rover (JLR) and Daimler’s Mercedes Benz.
The Mercedes Benz EQC, India’s first luxury electric vehicle, launched in October for $ 136,000, and has since sold 31 units, according to automotive researcher JATO Dynamics. British luxury car maker JLR, owned by India’s Tata Motors, plans to launch its I-PACE EV before March. It sells in the United States for around $ 70,000.
Although India’s road infrastructure has improved in recent years, traffic discipline – like track driving – is still rudimentary. Auto analysts say this means many of Tesla’s features, such as the automatic lane change feature, will be difficult to deploy on crowded Indian streets.
Stray animals, including livestock, and potholes on the road are another problem.
“Most of Tesla’s high-tech features will be redundant and users won’t get their money’s worth despite paying high prices,” said Ravi Bhatia, President for India at JATO Dynamics.
Rohan Patel, senior public policy executive at Tesla in the United States, is among those leading efforts around its launch in India, people familiar with the plans said. The EV giant is looking to hire 15-20 people primarily for sales and marketing, a source said.
Tesla and Patel did not respond to a request for comment.
India has some of the most polluted cities in the world and wants more clean cars on its roads, but the federal government still lacks a comprehensive policy like China that requires automakers to invest in this segment.
One of the reasons is that automakers pushed back saying there was no demand for electric vehicles in India as the costs of components like batteries remain high and push prices up.
And Tesla CEO Elon Musk himself has expressed concern about India’s high import taxes on cars.
Unlike India, China sold 1.25 million new energy passenger vehicles, including electric vehicles, in 2020 with total revenue of 20 million.
Tesla is a major player in China, which accounted for more than a third of the automaker’s global sales last year, according to JATO Dynamics, and where it also has a factory.
Daniel Ives of U.S.-based Wedbush Securities, however, said that within 7 to 8 years India could account for 5% of Tesla’s total sales. The key to success, however, will be local manufacturing, he said.
“It’s about when, not if, they build a factory in India,” Ives said, adding that building a local supply chain will be a multi-year effort.
“India is an ideal potential and Tesla does not want to be late game. “
Reporting by Aditi Shah and Aditya Kalra; Edited by Raju Gopalakrishnan
Original © Thomson Reuters
For Latest Updates Follow us on Google News
- Show all
- Most Viewed