A two-word tweet, and Tesla to set wheels on Indian roads

A two word tweet saying “as promised” and we knew Tesla is coming to India! In a reply to a tweet sharing the news of Tesla launching in India, CEO Elon Musk responded with two words, “as promised”. Early in October last year, Musk had replied to a tweet saying, “Next year for sure”.

The major American electric vehicle firm has registered itself as a company in India very recently, January 8, to be precise. The company, under the name of Tesla Motors India and Energy Private Limited hopes to begin functioning soon from tech city Bangalore. According to reports, the Indian unit will have 3 directors. They are Vaibhav Taneja who is the Chief Accounting Officer at Tesla, David Feinstein who is a global senior director and Venkatrangam Sreeram who is a senior board member of two other firms namely Xenon Automotive India and Clearquote Technologies India.

If we look back, Tesla had plans of bringing the brand to India in 2016 itself. They had even began taking bookings from India customers. But they had to back up due to lack of infrastructures here. 5 years later, the plan of Tesla launching in India is finally about to see the light of the day.

As far as we know, Tesla cars are going to be available in the market from mid this year. Reportedly, they will not hand the cars over to dealerships and will focus mainly on online selling.

Which car will it launch in India and what will be the price?

One of the first questions regarding Tesla launching in India that will determine the price of the cars is, will they be making the cars here? Well, the answer is ‘no’ for now. Tesla cars will come to India as Completely Built Up (CBU) units, i.e. fully manufactured cars. However, India levies a 100% import duty on CBU products. So naturally, the price is going to hike up unless the government decides to give them some concession. Hence Tesla will obviously want to have things balanced out and want to launch a model with an affordable price tag. All this sums up to one- Tesla’s most affordable car, the Model 3. This is the model that Tesla is expected to debut with in India and a calculated guess can estimate the price to be around 60 lakh. With the government recently pushing for and promoting electric cars to curb fuel consumption and pollution, Tesla can only hope to get some concession on the taxes but there are no official reports of the same.

The Model 3 comes in 3 different variants with battery capacities ranging from 50 KWH to 75 KWH. With a full charge, it can go from 381 km to 580 km. The Model 3 can literally go from zero to 100kmph in a matter of 3.1 seconds!

Heads up for India’s economy

Amid the pandemic induced economic downturn, India can definitely look positively at Tesla launching in India. Although for now Tesla will be importing fully manufactured cars, but there are reports that the company is also scouting for land possibly for a manufacturing and R&D set up in the country and is supposedly in talks with multiple states including Karnataka, Maharashtra, Gujarat, Tamil Nadu and Andhra Pradesh. If that be the case, then Tesla’s entry could help India become a global electronic vehicle manufacturer in future. Musk had said that he will be aiming to have around 20 million vehicles globally by 2015, replacing 1% of the fleet every year. Up to one tenth of that could come from India. But not so fast! Neither Musk nor the country will be ready for any major change towards electronic vehicles in 2021 itself.

On the other hand, Tesla setting up its own unit in India would mean major investments and job opportunities, both of which is extremely crucial for the country, given the current economic scenario.

How will it impact Indian automakers?

According to experts, Tesla’s entry into the Indian market will not impact the auto industry in the near to medium-term. This is because, for one, it will take establishing a wide network of vendors, software infrastructure, R&D, testing, etc. to develop a proper EV infrastructure in the country. India does not also have proper charging infrastructure which is sure to be one deterrent for EV car buyers, particularly when planning for longer journeys.

Second and the most important factor is definitely the price. On launch, the Model 3 of Tesla will cost around 55-60 lakhs whereas the market for premium cars costing more than Rs 50 lakh is minuscule in terms of sale volumes in India. The maximum volume of sales come from cars costing below Rs 10 lakh.

But another thing to keep in mind is that, at some point of time in the future, there will definitely be an EV revolution in India. But until and unless we have appropriately priced electronic vehicles made by other manufacturers in India, Tesla poses no threat. Experts say that Tesla giving a boost to the EV segment may even create a jump in the demand for batteries. Also, battery pricing will influence the overall price of these vehicles.

A two-word tweet, and Tesla to set wheels on Indian roads

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