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Tesla started to hire for a dozen jobs in Delhi and Mumbai
After years of speculation, Tesla could finally make her debut in India.
The American electric vehicle giant (EV) began to hire for a dozen jobs in Delhi and Mumbai. He would also be looking for exhibition halls in the two cities.
Asia’s third economy offers an interesting growth opportunity for Tesla’s futuristic cars while global sales of electric vehicles fall and competition from Chinese manufacturers becomes more intense.
But there is a question of a million dollars – Tesla compete in the Indian market sensitive to prices?
Tata Motors currently holds pole position on the India electric vehicle market – with more than 60% market share. MG Motors – jointly owned by the Indian JSW and a Chinese company – is second at 22%. They are followed by Mahindra and Mahindra.
Electric vehicles made by these companies cost less than half of what consumers will have to pay – around $ 40,000 (£ 31,637) – for Tesla’s basic model. It will therefore be considered a luxury car, in competition with high -end electric vehicles made by Hyundai, BMW and Mercedes.
In terms of volume, this will make India a small market for the head of Tesla, Elon Musk, unless the company introduces a low -cost model specifically for the country.
In addition to the price, the road conditions of India could make a challenge.
Tesla cars have a very low floor clearance – or the distance between the lowest point of the car bearing train and the ground. This will make adaptation to Indian roads difficult. To operate in the country, existing models may have to be redesigned – which would increase manufacturing costs.
Will Tesla do this just for a development market where he could only have a small presence?
“This was a challenge even with other global manufacturers of original equipment (OEM) to the task with small volumes. You cannot justify these major engineering changes,” the BBC Hormazd Sorabjee, editor -in -chief of Autocar India, told the BBC Hormazd.
In addition, in the middle of all the media threshing, it is easy to forget that sales of electric vehicles still represent less than 3% of global sales of passenger vehicles in India. Even critical auxiliary infrastructures, such as charging stations, have taken years to come. Although they have accelerated, there are only about 25,000 charging stations across India.
Indeed, Tesla will jostle for space on a very small EV market, but growing.
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Tesla CEO Elon Musk (left) met Indian Prime Minister Narendra Modi in Washington DC last month
But at a political level, India seems to do everything possible to court the car manufacturer.
The country has described an ambitious national vision to become electric. It plans to have 30% of private cars, 70% of commercial cars, 40% of buses and 80% of the two and three electric wheels by 2030. Most provincial governments have also established their own electric vehicle policies to encourage demand and supply.
The subsidies offered by India on electric cars are also the highest among major economies, according to HSBC Securities. They represent up to 46% of the price of the most sold electric car model in the country.
It is therefore not surprising that sales of electric passenger vehicles increased astronomical by more than 2,000% in less than five years, going from a base of 4,700 per year to 100,000 cars.
“The price difference between ordinary cars and electric vehicles has reduced a lot, which means that customers are thinking about their choice,” said Jyoti Gulia, founder of JMK Research.
In April of last year, India also reduced import taxes on electric vehicles for world car manufacturers who have committed to investing $ 500 million (400 million pounds sterling) and starting local production within three years.
Tesla and other imported electric vehicles costing more than $ 35,000 (£ 27,550) can now benefit from a drop in import rights of 15% out of 8,000 vehicles. This came after Musk complained that the rights to important important people had prevented the company from launching its cars in the great economy with the fastest growth in the world.
“It is quite intelligent, because it forces a global actor to locate himself – which is the functioning of the game: come and build in India,” explains Sorabjee.
The proposed policy could however disadvantage Indian car manufacturers, since the investment requirement for foreign players is “not significant” compared to the Indian players of this segment, warns an HSBC research document.
The 15% import duties are also “much lower” than the comparable combustion engine tax in India which also pay a tax on the additional road, according to HSBC.
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In the past five years, sales of electric vehicles have increased in India from 4,700 cars per year to 100,000 cars
National electric vehicle players say that having a “level playground” is important, but do not seem to be disturbed by Tesla’s imminent entrance for the moment.
“We welcome the competition,” Rajesh Jejurikar, Mahindra and the executive and CEO of Mahindra told BBC. His business believes that more players will strengthen the existing EV ecosystem of India and strives to improve the attraction of their offers.
Critical problems such as “the anxiety of the range” – the concern of knowing whether the battery load of an EV will be sufficient to make a trip – have been discussed by “a robust battery integration and rigorous real world tests in various road conditions”, explains Mr. Jejurikar, adding that the brand moves advanced technology in its product.
It will be difficult to beat Tesla’s Edge in this area, and associated with more robust batteries and a better user interface, he will certainly differentiate the Tesla cars on the market, explains Sorabjee.
What could also give Tesla Tailwind is the growing share of premium vehicles on the Indian automotive market. As a global brand with a perceived “quotient”, having a Tesla will be a symbol of status for the young Indian population ambitious.
But none of this – India’s electric vehicle policy or the growing demand for premium cars among India’s schools – has further led to Tesla’s commitment to putting manufacturing dollars in an installation of electric vehicles.
For the moment, it seems that the car manufacturer will only send units of its factories abroad.
When these changes will depend on many things – how much the wealthy consumer base of India is widening and what the tariff structures look like once India has completed trade negotiations with the United States.
President Donald Trump has already expressed his dissatisfaction with Tesla potentially to build a factory in India to avoid high prices. In an interview with Fox News recently, he said it would be “unfair” for the United States.
Could Trump’s “America First” policy decrease Musk’s appetite for the start of manufacturing units in India then?
The question is theoretical, but for the moment, it seems that India will first obtain tesla fascinating exhibition halls for its rich factories of Tesla when creating jobs for its under-employee masses.
