Tesla’s Trek To India

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Originally published on EV Annex.
By Charles Morris

Elon Musk has been talking about bringing Tesla to India for some time. In 2015, Prime Minister Narendra Modi took a tour of Tesla’s Fremont factory, and it was reported that the two discussed the possibility of someday opening an Indian Gigafactory. However, we’ve heard nothing about any such plans since.

At the moment, the only option for would-be Tesla owners in India (and other countries where the company has no official presence) is to import a vehicle from the US. This is far from an optimal way to go, as taxes and fees can nearly double the price of the car. Furthermore, India has no Tesla service facilities or Superchargers.

India in general is not a wealthy country, but it should have enough affluent buyers to make it a viable market for Tesla if prices could be brought down to a more reasonable level. In fact, the nation has at least one active group of Tesla enthusiasts. Tesla Club India (TCIN) sells Tesla-themed merch, including T-shirts reading “India wants Tesla,” and says that 100 percent of the profits will go towards building EV charging infrastructure in the country.

Elon Musk stoked Indian Tesla fans’ hopes in July when he tweeted that Tesla would launch Model 3 in India “hopefully soon.” Recently, TCIN followed up, asking Elon if Tesla was making any progress on expanding to the Indian market. “Next year for sure,” tweeted the Iron Man. Later he seemed to confirm that this was more than idle speculation, saying, “Will release order configurator probably in Jan.”

One obstacle to sales of Teslas (and other foreign-built cars) in India is the country’s high import duties. In 2019, Musk tweeted, “I am told duties are extremely high in India (up to 100%) even for electric cars. This would make our cars unaffordable.” Building a local factory would address this problem.

Another limitation is the lack of charging infrastructure — although EVs, especially 2- and 3-wheeled ones, are beginning to appear, public charging facilities are woefully inadequate (in fact, millions of Indians still have no electricity at all).

The good news is that the Indian federal government, and several state governments, are keen to encourage the EV industry. Reuters reported in September that the government is considering a proposal to offer $4.6 billion in incentives to companies setting up EV battery manufacturing facilities.

The government has released an Electric Vehicle Roadmap that proposes several measures to encourage EV manufacturing, and Minister of Road Transport and Highways Nitin Gadkari said the government was working towards extending the “best possible concessions” to the EV sector.

The Indian Department of Heavy Industry recently floated proposals to install 3,000 charging stations across 62 cities, as well as 1,500 highway charging stations.

Tesla has already had discussions with Indian officials about opening an R&D center in the country. “Tesla has shown initial interest to invest in a research and innovation center in Karnataka, and the talks are at a preliminary stage,” an official told The Economic Times.

The state of Karnataka has adopted a pro-EV policy, and already hosts several EV-related companies, including Mahindra Electric Mobility, Daimler, Bosch, Ola Electric, Sun Mobility, and Ather. Some local boosters have proposed Bangalore, the state’s capital, as a possible location for Tesla’s Gigafactory India.

 

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