Tesla, the world's biggest electric car maker, has been keen on a huge potential Indian market for long. The company's founder and CEO Elon Musk has expressed his desire to launch Tesla in India on several past occasions too but he had to face a lot of challenges such as high import duties, a lack of infrastructure, policy uncertainty.
However, Tesla registered its subsidiary in India which then opened the possibilities of it soon entering into the country. The senior executives were appointed and a showroom is opened at Mumbai. Further, Tesla was in talks for some sort of import duty and tax breaks with Indian government, as well as on the option to put up a production facility in India.
Many had anticipated that the Vibrant Gujarat Global Summit 2024, a biennial event that showcases the state's economic potential and lures global investors, will see Tesla announce its India foray.
According to reports, Gujarat would be Tesla's first choice to set up its plant in India which has emerged out as an automobile hub for automobile brands like Tata, Ford, Suzuki. The state government had also said very hopefully, Tesla will invest in Gujarat and Elon Musk will attend the summit.
However, these hopes were dashed when it was confirmed that Musk will not be attending the summit in Gujarat which took place from January 10 to January 12, 2024. A senior official of the Gujarat Industrial Development Corporation said that the investments by Tesla are welcome but they are not expecting Musk.
So, what does that leave the future of Tesla in India like? Does it portend a setback or delay for the EV maker's ambitions in the country? Or does that just suggest a change of strategy or focus?
According to some analysts, the absence from the summit of Tesla in no way underscores a lack of interest or commitment towards the Indian market. On the contrary, it could be a testament to Tesla's caution and pragmatism in weighing the costs vis-à-vis the benefits of coming into a market as complex and competitive as India.
Despite its premium products and cutting-edge technology, Tesla has got a few challenges in India like low consumer awareness and demand for an electric vehicle, high price sensitivity, inadequate charging infrastructure, and regulatory hurdles.
Moreover, Tesla faces competition from established players like Tata, Mahindra, Hyundai, and MG, which have already launched cheap and popular electric models in the Indian market.
Tesla therefore, according to the report from Bloomberg, may in phased and step-by-step manner enter India with first few number of imports of cars from 2024, and then establish its local plant by 2025. This would provide room for Tesla to market test, see the response, build its branding and network before scaling up in an even bigger investment.
Tesla can as well focus on other markets with immediate and potential lucrative chances including China, Europe, and the US with high presence and demand. Tesla may be giving greater importance to its new and upcoming products like the Cybertruck, the Model Y, and the Model 2 that are expected to supercharge its sales and profits.
But then, it doesn't mean Tesla is completely neglecting or closing its eyes towards India. On the other hand, Tesla may be preparing the ground for its eventual entry into India and is engaging with the government, the industry, and the consumers and building its capabilities and partnerships.
Tesla may also be waiting for a time and conditions ripe enough for its products to launch in India, the favorable policy environment accompanied by the supportive infrastructure and demand of the new generation electric vehicles from the consumer's side.
Elon Musk Is Eyeing Gujarat: Tesla Cars In India From 2024? | Tesla To Make In India pic.twitter.com/60LqeHDsjw
— Ivntv (@x_ivntv) January 13, 2024
Tesla's entry into India will benefit not only the company per se but also to the country at large, as that will bring along with it innovation, technology, and competition in a sector of electric vehicles, and also enable the government's vision of transforming mobility in the country towards clean and sustainable mobility. Entry of Tesla would also create an employment, investment and export opportunity while boosting up the image of India as a global manufacturing and innovation hub.
Accordingly, the future of Tesla in India might not lie in whether Elon Musk turns up to a summit or not but mainly on how well the company adjusts to the market realities and opportunities and possibly how much the society and the government are willing to embrace the entry of the car maker. Tesla's future in India may be bright, but it may take some time and effort to realize it. –(IVNTV)