Tesla may decide to sell imported cars in India before production
Tesla, owned by Elon Musk, may be abandoning plans to enter the Indian market in a big way. Rather than manufacturing these components, the company plans to construct and import CDS (car dealer simulators) or SDK (software development kits) units into the country. It may also consider importing vehicle units that have been totally assembled.
The electronic carmaker claims to be aiming to assess the market potential in India and gauge customer reactions before making a full investment. According to a report, the corporation plans to invest between INR 150 and 200 crores in the country throughout its stay.
Tesla’s revisions came around 6 months after it filed as Tesla India Motors and Energy Private Ltd with India’s Ministry of Corporate Affairs in January 2021, with ambitions to launch its electric automobiles in India by 2022.
On January 8, 2021, the electric vehicle behemoth was founded in Bengaluru, Karnataka, as a subsidiary of the foreign holding company, with an authorised capital of INR 15 lakh and a paid-up capital of INR 1 lakh. The three directors of the Indian business will be Vaibhav Taneja, Venkatrangam Sreeram, and David Jon Feinstein, according to corporate papers.
Apart from the original desire to assess Indian consumer behaviour and industry trends, there is another key reason why Elon Musk’s company isn’t going all out in India. While electronic vehicles (EVs) have been subsidised to some level, Tesla’s pricey offers will not qualify for EV subsidies in India because the top ceiling for an EV to qualify for subsidies is INR 15 lakh. In addition, the cost of a huge number of imports and exports that the company will have to make adds to the already high cost of doing business.
Even Tesla’s normal high pricing will be an issue in Indian markets where people are not willing to spend much. Tesla’s best-selling Model 3 costs $37,990 to $54,990 (INR 28 lakh to INR 40 lakh) in the United States and is projected to cost $95,496 in India (INR 70 Lakhs).
In India, the electric vehicle industry is still in its infancy. India has set a target of 30 percent electric vehicles on roadways by 2030, which is a lofty goal given that just 32 percent of states and union territories have adopted measures to encourage electric vehicle adoption.
Between 2014 and 2019, Indian EV entrepreneurs raised $601 million, according to the Inc42 Plus EV report. By 2030, electric cars are expected to have a market share of 70% in commercial vehicles and 20% in two-wheelers, respectively. Furthermore, the market share of these vehicles is expected to exceed $20 billion.