TESLA ENTRY IN INDIA

One of the questions that is frequently asked to Elon Musk has been “When will Tesla
launch its cars in India?”. Once again, a fan from India asked this question and Elon
Musk shared an update.

Pranay Pathole, in a tweet said, “Yo @elonmusk any further update as to when Tesla's
will launch in India? They're pretty awesome and deserve to be in every corner of the
world!” Responding to this, Musk said that “Still working through a lot of challenges with
the government.”

Tesla had received approval in India for four models in August 2021 and another three
models in December 2021. While the models have not been revealed yet, the Model 3
and Model Y have reportedly been spotted in the country.

One of the issues being faced by the Elon Musk-led company is the imposition of import
taxes. Tesla had urged the Indian government to slash import taxes on electric vehicles
and even requested a meeting between Musk and Prime Minister Narendra Modi.

The Indian government levies a 60% import tax on electric vehicles priced $40,000 or
less, and 100% on those priced above $40,000. In comparison, Tesla cars start at
$44,690 (approx. ₹33,41,780) in the US, meaning Tesla’s cars will face a 100% import
tax in India, hampering the company’s sales.

While Tesla has been requesting for a reduction in import duties for some time now,
Indian companies like Tata Motors have opposed such a move as it would incentivize
imports and go against the country’s plans of boosting local electric vehicle
manufacturing.
Tesla had plans to enter the Indian market by 2019, but it seems that still, they are a
long way from achieving the goal. Recently, Tesla CEO Elon Musk said in a tweet, "Still
working through a lot of challenges with the government." The tweet from Musk came in
response to a tweet from a person who inquired about Tesla's entry into India. The
delay in Tesla's launch in India is a result of a slight disagreement between the
central government and the electric car makers.

The stalemate situation between the two is because of a country's import duty of around
a hundred per cent. In 2020, Musk announced plans to open the production of Tesla
electric vehicles in India and a subsidiary Tesla India Motors and Energy Private Limited
was established in Bengaluru in Southwest India. Musk said he was ready to build a
Tesla factory in India if the country reduced the cost of importing electric vehicles. 

However, the government has criticised Elon Musk's tweet. Nitin Gadkari, Union
Minister of Road Transport and Highways said that if Tesla assemble and sell the
vehicles in India, they can reap the benefits of the PLI scheme for automobiles and
specifically electric vehicles.

Tesla's request for tax cut has received support from Hyundai Motor India Ltd. and
Volkswagen AG's India unit. However, Mahindra and Mahindra Ltd. requested import
tariff reviews and lower domestic levies.
It's also difficult to see how Tesla's sought-after and expensive autonomous driving
features will work on India's congested roads.
Ammar Master, a forecaster at consultancy LMC Automotive, said he expects Tesla to
annually sell only 50-100 of its Model 3 electric sedans in India, at least in the first five
years.

"As a country, India is still not so environmentally conscious to pay that much of a
premium," Master said.
"It always comes down to the price point. There will be some high net-worth individuals
like movie stars and top business executives who will look at it for the brand value. But
then, how many buyers are there?"
The world's most valuable automobile manufacturer registered a local company in India
earlier this month, a step towards its entry in the country, expected to be as early as
mid-2021.
Tesla plans to import and sell the Model 3 in India for around $65,000-$75,000 - roughly
double the price in the U.S. market, sources familiar with the plans said.

This means it will compete in India's even smaller luxury EV segment that has recently
started seeing interest from the likes of Jaguar Land Rover (JLR) and Daimler's
Mercedes Benz.

he Mercedes Benz EQC, India's first luxury EV launched in October for $136,000, and
has since sold 31 units, according to auto researcher JATO Dynamics. British luxury
carmarker JLR, owned by India's Tata Motors, plans to launch its I-PACE EV before
March. It sells in the United States for around $70,000.
Although India's road infrastructure has improved in recent years, traffic discipline - like
lane driving - is still rudimentary. Auto analysts say that means many of Tesla's features
like the automatic lane changing function will be tough to deploy on crowded Indian
streets.
Stray animals, including cattle, and potholes on the road are a further problem.
"Most of Tesla's high technology features will be redundant and users will not get the
bang for the buck despite paying premium prices", said Ravi Bhatia, president for India
at JATO Dynamics.

Reference:

https://www.livemint.com/companies/news/teslas-india-plan-seen-facing-many-
challenges-11611309120835.html