Tesla is set to make its India debut, with the American electric vehicle giant hiring staff and scouting showrooms in Delhi and Mumbai. The move comes as Asia’s third-largest economy offers a significant growth opportunity for Tesla’s futuristic cars, given the global EV sales slump and intense competition from Chinese manufacturers.
However, the question remains whether Tesla can compete in India’s price-sensitive market. Tata Motors currently dominates the EV market with over 60% market share, followed by MG Motors and Mahindra. The cost of EVs made by these companies is significantly lower than what consumers would pay for a base model of Tesla, making it seem like a luxury car.
To operate in India, existing models may need to be re-engineered due to the country’s challenging road conditions, which could drive up manufacturing costs. However, Indian domestic carmakers are unfazed by Tesla’s impending entry, welcoming competition and believing that more players will strengthen the EV ecosystem.
Despite this, it is unclear whether Tesla will introduce a low-cost model specifically for India or continue shipping units from its factories abroad. The US government has already expressed concerns about Tesla potentially building manufacturing units in India to avoid high tariffs.
India’s EV policy aims to have 30% of private cars and 70% of commercial vehicles go electric by 2030, with subsidies offered by the country being among the highest among major economies. However, this will put Indian domestic carmakers at a disadvantage if foreign players are given preferential treatment.
Ultimately, Tesla’s success in India depends on its ability to introduce affordable models that address the country’s unique challenges and capitalize on the growing demand for premium vehicles among India’s affluent population.
Source: https://www.bbc.com/news/articles/crkn28dpl4no