What can we expect from Tesla’s entry in the Indian EV market?
Apr 19, 2024
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Elon Musk's upcoming visit to India sparks discussions about Tesla's entry into the Indian EV market. The podcast explores topics like the implications for local manufacturers, India's evolving EV policies, challenges in infrastructure, and the potential impact on the market dynamics. Key questions include the readiness of the price-conscious Indian market for expensive EVs and the implications for 'Make in India' initiatives.
India's revamped EV policy aims to boost adoption by increasing subsidies and making EVs financially attractive.
Tesla's potential entry into India faces challenges of balancing domestic manufacturing interests with attracting foreign EV makers like Tesla.
Deep dives
India's Evolving EV Policy
India's approach to EVs has historically been cautious, with initiatives like the National Electric Mobility Mission Plan and fame India schemes offering incentives and subsidies. However, the revamped EV policy introduced in June 2021 marked a significant shift by increasing subsidies and setting a price cap on incentives for EV buyers. The policy aimed to boost EV adoption by making them more financially attractive, with specific adjustments favoring the demand side of the market.
Tesla's Entry into the Indian Market
Tesla's potential entry into India has sparked discussions on the readiness of the market for high-end EVs. Elon Musk's previous attempts to collaborate with the Indian government faced challenges due to demands for duty cuts and other concessions. However, recent policy changes, such as reduced import tariffs, indicate a shift in India's stance toward attracting EV makers like Tesla. The focus is on balancing domestic manufacturing interests with facilitating tech transfer and fostering a competitive EV market.
Infrastructure Challenges and Market Expansion
India faces infrastructure hurdles, with a limited number of public charging stations hindering widespread EV adoption. The ambitious EV 30 at 30 goal, targeting 30% EV sales by 2030, necessitates significant infrastructure and manufacturing capacity enhancements. Current challenges include insufficient charging stations and manufacturing capabilities, highlighting the need for substantial growth to meet the EV targets.
Global EV Market Trends and Tesla's Strategic Moves
The global EV market slowdown, attributed to supply chain disruptions and raw material shortages, poses challenges for EV manufacturers worldwide. India's potential to attract foreign investment amidst this market shift creates opportunities for Tesla's entry. While India's raw material sourcing is still evolving, the focus on becoming an EV hub presents a strategic advantage for Tesla's market positioning and potentially spurring the growth of critical EV components.
Elon Musk is coming to India. He is meeting Prime Minister Narendra Modi, and is likely to announce the entry of Tesla into the Indian market. The timing of this visit is interesting. Tesla used to be the world’s largest seller of electric vehicles or EVs – but it lost that title to China’s BYD Auto last year. Also, most of the EV markets in the West --- in North America and Europe – are in a slowdown. In China, Tesla has been losing ground to local competitors. But India, on the other hand, is looking to expand its EV density in a big way – it unveiled a new EV policy in March that is seen by many as tweaked to make the country more attractive for Tesla.
What is the agenda of Musk’s visit in the context of EVs? Is the price conscious Indian market ready for the kind of expensive EVs that Musk sells? If Tesla is allowed to sell imported cars, what happens to ‘Make in India’ and technology transfer to local manufacturers?
G. Sampath is joined by Randheer Singh, CEO and Founder of ForeSee Advisors, an electric mobility and battery storage consulting firm, and a former director of e-mobility at NITI Aayog.
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