Tesla CEO Elon Musk has postponed a scheduled trip to India this week, where he was supposed to meet Prime Minister Narendra Modi, stating “heavy Tesla’s obligations.”
Anadolu | Anadolu | Getty Images
India sought to become a global production center, successfully invited the main companies like Apple to establish, as well as expand production in the country.
In order to further strengthen his production skill, the South Asian nation watched Tesla to set up his base in the country. And a car manufacturer that has long appeared now reluctant to signal interest in the market, while the Indian government is trying to welcome it by applying a new EV tariff policy.
Tesla is allegedly Employment and reconnaissance locations of exhibition salons in the country, after a meeting Between Indian Prime Minister Narendra Modi and Tesla CEO Elon Musk earlier this month.
“One thing is for sure, Tesla comes to India on the basis of recent news, and the Government is also very serious about it,” Puneet Gupta, director of the Indian car market on S&P Global Mobility, told CNBC.
India introduced EV policy last year that proposes to lower Imports of customs on EV on 15% from about 70%,, Given that the Government began to accept applications to this policy before the end of March, according to the domestic news agency IANS.
This relaxation only applies to the premium EV’s price of over $ 35,000 and requires investments in the total amount of almost $ 500 million and long-term plans to install local production.
EV policy is a targeted move to attract Tesla’s business interests, signaling the willingness of India to support EV production, Ammar Master, Automotive Director on Globaldata, for CNBC.
“The Indian government was proactive in its attempts to lure Tesla to establish its production base in India,” he said.
However, the car manufacturer is facing several winds to break into the third largest car market in the world.
It is unclear whether Tesla’s intake makes sense within the Indian investment scheme, with any plans that the car manufacturer could probably be slowly and in a measured way because of several barriers to enter, said Gupta and other analysts.
Questions and dedication questions
According to a recent Bank of America research note, if Tesla entered this scheme, this would turn into a minimum car price in the amount of $ 40,000.
At this price, Tesla EVS would enter the Indian market at a very high price, above what existing Indian OEM provides and imply a small addressable market, Bofa said.
According to the planned EV scheme, Tesla should also follow a three -year time lane to install production drives in India, reaching 50% of domestic values within 5 years.
Analysts say jumping into this obligation would be premature for Tesla, based on their current prices.
BNP Paribas research note on Monday stated that local production in India will not make sense if Tesla cannot reduce vehicles at below $ 30,000 to allow mass quantities in India.
In the meantime, Tesla has not yet signaled a significant interest in setting up a production base in the country, and its recent job openings consisted of mostly positions facing consumers.
In addition, geopolitical obstacles can influence the decision of Telsa to produce cars in India under the new administration of Donald Trump. In an interview with Test Director Tesla Elon Musk last week, President Trump said that Tesla production in India will be “Very unfair.”
The company also works to complete the production of production drives in Germany and Texas.
‘Slow and measured’
Considering the challenges of prices and investments, experts said CNBC that Teslin India Foray would start with car exports to the market to first test the waters.
“We expect Tesla’s entry into India to be slow and measured, given the low average market price,” BNP Paribas said, noting that the company plans to launch more accessible models later this year.
In the meantime, the Gupta S&P Global Mobility said Tesla would probably encourage India to further adapt her EV tariff policy, allowing her to start shipping to the country more easily before any investment promise.
Some Local media sources In India, they reported that the Government could further adapt to EV politics to attract Tesla considers the market.
“Even if they are committed to the current proposal, it will pass after six months,” Gupta added.
However, although the Indian EV market remained a little, Tesla could have a valuable endeavor because it is looking for new markets in the midst of intense competition with EV Chinese manufacturers, such as ByD.
“With current momentum, we project that the sale of Bev passengers in India will reach a million units by 2030, which makes up 20% of the total sales,” said Master Globaldata Ammar.
