June 17, 2021
The CBS Post

THE VOICE OF CBS

Tesla’s Advent to Indian Roads

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In the late nineteenth century, the genius scientist Nikola Tesla immortalized his name in history through his life-changing invention – ‘alternating current’. Just about a century later, his name would again be associated with electricity, this time through electric cars. Tesla Motors was started in 2003 by its five co-founders, one of whom is currently the richest person in the world. The company is presently the most valuable automobile brand in the world with a market capitalization of around $800 billion which is roughly 4 times the market cap of the second most valuable brand, Toyota.

Tesla has  acted as a major disruption in the automobile industry by providing a viable alternative to Petrol/Diesel vehicles. The company currently operates in more than 40 countries and has recently set up an R&D in India too. As of now, the Electric Vehicle market is mostly untapped in India and has a huge growth potential. A report by CEEW Centre for Energy Finance (CEF) claims that the Indian EV market could be worth $206 Billion by 2030. Tesla wants to enter early and gain a significant share in India before other startups and companies occupy the EV stage.

It isn’t going to be an easy ride for Tesla though. A number of hurdles stand in its path to Indian roads. The infrastructure isn’t ready and there aren’t enough charging stations in the country to sustain the EV market. Although the government has plans to set up 69,000 charging booths for the EVs and, going by the government’s track records, it’s going to take years to do so. The government hasn’t even reached 1% of the 69000 target since it was announced last year. Moreover, in a country where rash driving and traffic violations are a common sight, it’s difficult to say how useful Tesla’s autopilot feature would be. Tesla’s Auto-drive feature works on lane-marking and India has long stretches of roads without any such markings. It would also be interesting to see how the Artificial Intelligence would react to mopeds zipping around with no regard to traffic etiquette, cows jumping out of nowhere and the omni-present potholes.

Another worrying factor is the expected cost. The Model 3 is likely to be Tesla’s debut model and taking into consideration the costs of import and taxes, the price is expected to be in the range of ₹50-60 lakhs. When 75% of the auto sales are below ₹10 lakhs, it would be difficult for Tesla to penetrate into the market. 

Even if the cost problem is somehow solved, the patriotic Indians aren’t going to easily accept the fact the vehicles are being imported into their country from their neighbour, China. The prevailing anti-china sentiments in the Indian market could hurt the EV makers’ already low market share. There are plans of a Tesla manufacturing plant being set up in Gujarat but in its initial few years, the vehicles would be imported from Tesla’s GigaFactory in Shanghai.

Tesla is already revolutionizing the automobile industry and is definitely a pioneer in the EV space. But in the Indian context, it has tons of issues to solve. And until then, Tesla is likely to remain a niche product in the Indian market. Tesla’s Indian dream is not as close as it appears.

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