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Why Tesla has been reluctant to enter operations in India?
YB WEB DESK. Dated: 11/24/2020 11:40:38 AM
AAHAN PANDITA
Jammu, Nov 23 Tesla a globally renowned brand known for its pioneering in the Electric Vehicle business and the automobile industry as a whole. The California based company is known for its technologically advance luxury electric vehicles, solar energy generation and energy storage products. Tesla is also known for its’s massive ‘Giga factories’ costing billions of dollars each. With a major global presence in various parts like the US, Canada, Germany, Netherlands, South Korea, China and many parts of Europe. It is quite certain that the questions arise ‘why hasn’t this EV giant entered a potential market like India?’ India may seem like an attractive endless ocean of potential customers but the reality is far from the expectations. Although India is a nation with a population of more than a billion people, we must not forget that it is still a ‘lower-middle-income’ nation with an annual percapita income of Rs 1,35,050 (2019-20) which is roughly USD 1,833. On comparing this to the price of the cheapest Tesla available that is the Model 3 which has a price tag of USD 37,990/- which is roughly Rs 27,96,000 we get some idea of the situation on the ground. The pricing of Tesla seems much more attractive for markets in ‘high income’ nations with a higher per-capita income. Another aspect is the quality of roads, India is known for a variety of its exotic products but unfortunately, Indian roads are not one of them. Lately, India has started rapid construction of high-quality highway and expressway infrastructure, however, it does not undermine the condition of its crowded narrow lanes with uneven roads without any road markings with complimentary potholes in some of the major metropolitan cities. Tesla is quite famous for the ‘autopilot’ feature present in all its cars which includes advance driving assistance such as lane centring, automatic lane changing, self-parking and much more with a combination of high definition cameras, sensors and highly refined software. This feature works well with lane markings, which is common on any road in most developed nations but rarely found on the regular roads in Indian cities, newly built highways or expressways are exceptions. Also, the fact that animals like dogs, cows and buffalos roam freely on the streets in India, driving on autopilot in such conditions may prove to be nothing short of risky. EVs are on the rise in India with automobile manufacturers like Tata, Hyundai, MG, Mercedes Benz introducing their own versions of electric cars as the newer generation of India are becoming more aware of sustainable energy and developing a sense of responsibility towards the environment. Certainly, the competition will be on the rise for a brand like Tesla which deals exclusively with EVs only. Another concern for Tesla maybe the lack of supporting infrastructure of charging stations in general as only about 250 public charging stations are present in India. Though this number is on the rise with the increasing demand for EVs in India, Tesla will also have to build hundreds if not thousands of its Tesla supercharging stations throughout the country. Import taxes in India is one the highest in the world, such taxes are imposed in order to safeguard the local manufacturing. This is a major concern for any company looking to start operations in India. Import duties for cars costing over USD 40,000 or Rs 29,44,880 is 100%. Keeping this in mind, Tesla would have to pour in heavy investment in order to operate in India which may be in the form of a manufacturing unit or a Gigafactory as it did in China in order to avoid the hefty import duties. Either way, Elon Musk (Tesla CEO) said that Tesla would enter the Indian market in 2021. It may be challenging for Tesla but a market like India surely promises success in the long run.