“India is hungry to join the EV race, the thing that the county has to overcome is that the market for EVs today is basically non existent” says, Michael Dunne, CEO, ZoZo Go
“I think now the time has come you know we are finding consumers really interested in electric mobility solutions”
says Puneet Gupta, Director, Automotive Forecasting IHS Markit
“There is lot of news of Tesla coming into the market for a long time now our opinion is that there’s more hype than what the reality might offer”
By all accounts you seem to be setting up an i.t. R&D setup in Bengaluru and that would be the starting point. i think the minister is on record saying whatever it takes for Tesla to equal its production costs in China will get it done”
Says, Michael Dunne, CEO, ZoZo Go
But India is unlike the other countries where Tesla has been successful.
“The cars that sell in the mass market segments are relatively cheap products” says, David Leggett, Automotive Analyst, GlobalData
“80% of the cars sold in the indian market are priced at under 12000 dollars.” Says, Michael Dunne, CEO, ZoZo Go
It also lacks the infrastructure needed for widespread ev adoption
There are obvious challenges ranging from the lack of charging infrastructure to driving lane consistencies and if tesla does eventually come to india it won’t be easy.
“It’s not going to be like a china market for instance. People like honda, toyota, ford, volkswagen being in the market for decades but they’re having market shares of one to two percent.
Would people rush to buy a tesla it is unlikely but it is trying to woo tesla to setup its production base in india.”
And if Tesla can establish a foothold as india transitions to electric it could be big for the company.
They certainly want to be positioned in markets though that are going to be high growth india looks like over the next 10 years it should be a relatively high growth market.
They have been talking about entering india for a long time now and it’s one of those markets that people are always trying to say yes there’s huge potential but then again you have everything boils down to profits
India’s car market is unlike any other in the world despite being one of the most populous countries it doesn’t have any very many cars. The indian market overall is a small car market.
We’re talking about probably three and a half million like vehicles sold a year which compares with well over 25 million in China. Car ownership is still comparatively much lower when you compare it to a place like the united states and so a lot of people mostly rely on two wheelers and three wheelers to get to places.
It’s dominated by motorcycles and mopeds which make up a majority of vehicle sale within the passenger vehicle category the market is mostly controlled by a few big players.
Maruti Suzuki which is owned by suzuki is the number one player in india. They control something like 50% of the market share and everyone has found it though i mean you have been reading gm getting out of india, ford has significantly reduced his operations.
India’s auto industry has been growing it’s now the fifth largest auto market in the world behind Germany, Japan the U.S. and China and it’s expected to grow 11.3 % from 2020 to 2027 but overall, car ownership is uncommon.
Only 22 out of every 1000 indians have a passenger vehicle and the most most popular are on the lower end.
“It is a very cost-conscious market because it has so many cheaper alternatives available. The best-selling brand in India is Maruti.
They’re experts making mini vehicles which are really cheap. They cost around ten thousand dollars that’s what makes up a bulk at least half of the indian market is cars in that price range and of that size. The luxury segment is small but it’s expected to grow at about six percent in the next five years.
Do you have entrenched players like most of these fans bmw who are the number one and the number two players in the market but the luxury car market accounts for only only one percent of the passenger vehicle market.
There are not many electric vehicles that is starting to change electric cars are still a very minuscule portion of the total number of vehicles sold in india.
The EV market in India is just at the very nascent stage.
Tata motors are going to be launching their EV vehicles
“Maruti Suzuki has plans to launch hybrids EVs which they would have a joint venture globally with toyota.
Electric auto rickshaws have been around for quite some time now there are about 1.5 million electric autorickshaws that are used by millions of indians everyday
Tesla’s entry into india is highly anticipated. But its cars will be out of reach for most consumers. There is virtually no premium market for electric vehicles in India and very little potential at least in the short term for Teslas to sell in numbers in India.
“You’re not talking about the average middle class person who’s going to be buying a Tesla in India.
Its has adjusted its pricing to boost demand in China it has reduced the cost of model 3 several times.
Tesla will want to go as aggressively as possible in price i would look for them to position the model 3 or model i may be imported as knock down parts from China assembled in India and sold as exclusive premium products
And when Tesla does come to India, it will be entering the EV market in it’s infancy charging infrastructure is still not upto where it is supposed to be and most of india’s power grids are coal powered and power outages especially during monsoon season for example are very common.
Some of its signature features may not be available either
A lot of technologies that Tesla does have may not work in India. Things like autopilot and autonomous driving and those kind of features and auto change landing features.,
But brand recognition in India is strong.
Tesla definitely has a loyal brand following in India it’s small but a loyal brand following but will that turn into sales it’s hard to say initially.
Tesla has the kind of potential to actually double or triple the premium car market in India.
Some experts thinks importing into india may be the best move for tesla
I think they probably would initially want to establish presence in terms of brand and having some visibility
They would import the vehicle whether it’s China or whether it’s U.S. my point is always that does that kind of investments to setup a factory offset all import duties.
But import tarifffs and China tensions could drive up the cost.
India has import tariffs stiff import tariffs that can go upto as much as 50 to 100 percent and cars would become even more expensive
Having an assembly plant in india is one way around that and they could actually import what we call knock-down kits so they actually make the most of the cheap labor force
As the EV market grows Tesla could then setup manufacturing within India
They could start operating ckd factory similar to what Mercedes Benz and BMW done at around 20 thousand 30 thousand units per annum capacity plants.
Government Incentives and policies were used in China the U.S. and Europe to help jump-start the industry in those countries
So india just cannot afford to go electric yet unless the indian government jumps in there and says okay we’re going to fund this
The Government has over the past years announced some initiatives to incentivize battery producers to set up shop in India to give incentives to buy electric vehicles and wanting to incentivize the local car makers to produce more electric vehicles by imposing tariffs on imported ones
Form a tax point of view i think the EVs are charged only 5% whereas all other passenger vehicles are charged at 28% but more needs to be done
Though the Indian Government does have some incentives that could benefit EVs, it is not a high priority
For the Government to provide massive incentives for the automotive sector always splitted against who they need to do more for other social programs you know what about unemployment what about you know food shortages and things like that which are more relevant to the country as a whole
And it is unclear whether tesla is working with the Government like it did in China
It might be their interest to actually string that out a little bit the local governments on the ground are actually in a bit of a bidding war in terms of offering incentives
Tesla will be facing increasing competition several automakers have plans to introduce electric cars in India
India’s local manufacturers,, Tata Motors ,. Mahindra & Mahindra.. Most of these pens have started to enter the market with the EQC last year. Jaguar i-pace will be launching soon. Tata Motors has already started with the Nexon EV.
With the high costs associalted with the EVs today. Tesla’s biggest competition may still be cheaper gas-powered cars.
Internal combustion engine vehicles are still very popular in India because they are comparatively cheaper and so there’d be competition from these local producers as well as the foreign imported cars
But if tesla were to build a more affordable EV it could give tesla the competitive advantage it needs.
It is very much possible you know that Tesla may develop a frugal solution you know in India
India wants to embrace electric vehicles but they’ll do it at very low price points like less than 10,000 dollars.
They’ll invest in two wheeler and three wheeler electrics because that’s where the market is and then eventually move up into cars and then up into premium cars given all the challenges that india does have
We don’t think that the EV market in India will take off in any fashion over the in the near future or even the longer term.
India’s growth fell off a cliff last year because of the coronavirus pandemic and so the immediate priorities right now is to get that growth back on track may be some of that can be incorporated into the electric space but that remains to be seen
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