The global automotive industry is undergoing a paradigm shift at present in trying to switch to alternative/less energy-intensive options. India, too, is investing in this electric mobility shift. And Tesla is the company that has the aspiration to operate in India. Some months ago, Tesla Inc, has received approval for four of its vehicle variants from the Ministry of Road Transport and Highways. Automobile manufacturers have to mandatorily get their vehicles certified by the local authorities before they officially launch them.
According to a report of Soumen Mandal, research analyst at Counterpoint Research, India is believed to become one of the largest EV markets soon and Tesla is aware of this fact. The report claims that Tesla could announce the production of its cars in India as early as next year.
“None of the big automakers wants to leave out the opportunity to acquire a share in the India market. Tesla is not an exception in this case. The cheap availability of resources and lower labor cost will allow Tesla as well as other automakers to earn a higher profit if they set up a local manufacturing or assembly plant,” Mandal said.
Earlier this year, India’s Transport Minister Nitin Gadkari had said that the country is ready to offer incentives to ensure that Tesla’s cost of production would be less than in China if the carmaker commits to making its electric vehicles in India.
The Indian passenger car market is mostly dominated by cars priced below Rs 10 lakh, whereas the current Model 3 of Tesla costs (about Rs 29 lakh without import and other taxes) put the car in the premium segment, and the market share of the premium segment in the country was just 7 percent in 2020.
Presently, India is under the global spotlight due to the production-linked incentive (PLI) scheme. Under the scheme, the foreign manufacturers can acquire resources at very nominal cost only if they set up manufacturing or assembly plant, locally.
The PLI scheme has been extra generous towards electric vehicles and its components like batteries because India is already running behind in EV adoption and wants to put a significant number of EVs on road by 2030.