Written by Om Desai
“Tesla’s global sales reach 4.99 lakh”. “Tesla's stock shoots up by 1,099% in just two years”. “Elon Musk becomes the richest person in the world with a net worth of over $200 billion”. If you follow the news, then it is almost certain that you’ve seen these phrases being thrown around in news headlines. One such startling news that will definitely change the future of Electric Vehicles (EVs) in India is the launching of Tesla Motors in the country, confirmed by the man himself on Twitter.
Going from 0 to 97 km/hr in just 3.1 secs and armed with a top speed of 261 km/hr, the Tesla Model 3 will definitely attract wealthy car enthusiasts as soon as bookings start in January. Due to Tesla vehicles’ smart tech components and fully autonomous driving experience, they have been in demand for many years. The Indian auto market has huge potential but is also one of the most price-sensitive markets in the world. Expected to be priced from Rs. 55 lakh, the Tesla Model 3 will become a more premium option compared to its competitors. The company claims the machine can run up to approximately 450 km on a single charge. Meaning, it can’t be used for long drives and interstate traveling here. As a result, the Tesla car just becomes a quick, high-speed daily ride on the busy streets of India — where you actually need to crawl. Another major issue with the claimed range is that it has been quoted according to European and American road standards — places where almost all roads are properly paved and traffic rolls smoothly. This ambitious range of 450 km will be difficult to achieve on most Indian roads.
Although the Road Transport & Highway Minister Nitin Gadkari confirmed Tesla’s arrival, there is still a lack of proper infrastructure for EVs. Due to the scarcity of ‘charging stations’ on roads, you’ll have to head back to your home to recharge your vehicle. Moreover, with Tata Motors, M&M, and Maruti Suzuki launching more of their EVs in 2021 at much cheaper prices, the market will be distributed — though Tesla will still remain in the category of premium EVs.
Now, will Tesla actually be able to replicate its China-like success in India? I predict that Tesla might enjoy some small-scale success but it won’t be anything spectacular. Although the company is rolling out Completely Built Units (CBUs) of Tesla Model 3 in India, it may choose to make models locally for the world depending upon FY21 sales reports. These Indian-manufactured models can be expected by 2023 when the “Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India” (FAME) scheme will be in its third phase.
Interestingly, Tesla is expected to approach with a three-headed strategy that can potentially increase sales. The company will probably have to first drop some R&D teams locally in order to evaluate the local markets. Simultaneously, exploration for tie-ups to distribute the charging networks and support for buyers has to be done. At the same time, if the company expects the manufacturing to get started by 2023, it will have to start approaching local suppliers for smaller components.
With Tesla coming to Indian markets, there will be significant relative growth in the EV market and the company could become the leading EV manufacturing hub in the next five years. Maybe then, Tesla will become more affordable and will suit the Indian customer base. Tesla has also been in talks with the Government of India and is planning to set up an R&D center at Bengaluru. There were at least two rounds of discussions between two bodies and reports confirm that Tesla may establish its first facility in either Maharashtra or Kerala. Job creation and economic growth are the primary drivers behind the different states’ motivation to set up EV hubs in their state. Tamil Nadu, Karnataka, and Haryana are a few other states that are also keen to give Tesla a green signal for an assembly set-up in the future.
No matter which state grants the signal first, Tesla has become synonymous with energy efficiency and is undoubtedly the leader in EVs globally. In the near future, the advent of greener and smarter cars will surely begin in Indian markets. As the Government plans to fully generate “green power” & “green railway” by 2030, Tesla’s launch can be considered the beginning of a “green automobile” revolution for India.