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Tesla in India: An impending Disaster?

Updated: Jun 2, 2021

The world's 5th largest automobile market has been waiting since 2016 for Elon Musk's pioneering EVs to hit the streets. After delaying the proposed launch in 2017, a second announcement was made to launch the Model 3 in India with bookings said to go live in January 2021. Several news outlets published the exciting news that Tesla was finally going to be available in India.

However, the official website of Tesla has no details of any of their cars being available, including bookings in India. The website has no mention of India anywhere. Even google fails to show any results of official confirmation from Tesla regarding the same.

However, going by the news from several major outlets, Tesla has registered a subsidiary in the southern state of Karnataka in the country. And this is true as the website of the ministry of corporate affairs, Govt. of India, shows an approved company registered as TESLA INDIA MOTORS AND ENERGY PRIVATE LIMITED.

Assuming that Tesla is going to launch its vehicles in India this time, based on the news we have so far it could be headed for a spectacular disaster (because everything Elon does is spectacular).

Tesla is launching the Model 3 in India with prices starting from 6 Million INR (speculated). The same car costs around 2.9 Million INR in the US. Now there are manufacturers like Audi, Mercedes and BMW who have their products selling at this price range. But these companies offer luxury vehicles and their combined market share is less than 1% in India.

Also, these companies offer luxury in terms of refinement as well as comfort features. Tesla cannot compete with the German brands in terms of luxury. Tesla has managed to sell cars in other markets by offering fast electric cars that can travel as much on a single charge as an ICE car.

But the Indian car market is different. Even though over the last few years, there has been increased demand among buyers for better style, performance and safety, the majority of the market still looks to get the most for each rupee spent.

Upon launch, Tesla may find buyers who are willing to shell out such exorbitant sums but once the initial excitement fades, Tesla will find itself selling less than 20,000 units a year, ending up as fancy toys for the wealthy.

Tesla cannot enter India with one foot out of the door.

The current strategy of Tesla seems to be a preparation to exit the Indian market at the first sign of distress. This is surprising because Tesla as well Elon Musk have a long history of never giving up even when the whole world lost faith in them.

If Tesla fails in India, it will be a setback for the EV industry in India. It will deter new players from entering the market. This will increase India's reliance on fuel imports as well as pollution in cities. So Tesla must succeed in India.

Instead of trying to be a Mercedes or Audi, Tesla should replicate in the Indian EV market what Suzuki did with the Indian automobile market in the 1980s.

Tesla needs to come up with an India specific lineup. It should launch with at least two models from the table below. All the models should offer a minimum of 400 Km of range. Currently, not a single model offered by Tesla will be able to meet these specifications.

This is why Tesla needs to go all in. It should set up an R&D centre in India for these news models. They should be manufactured in India, not assembled. The government of India has hinted at concessions if the company manufactures their vehicles in India.

Eventually, India can transform into a hub for manufacturing and exporting EVs in other developing countries in Asia and Africa.

The launch should be delayed further to 2023. Tesla being notorious for its delayed roll-outs will mean that these cars will hit the Indian roads in 2025.

Tesla should utilise the next 3-4 years to set up their charging network extensively across India. They should focus on major cities and national highways. If Tesla can reach a deal with companies like Tata and MG to make these chargers compatible with their EVs as well, Tesla can have an upper hand in the charging network of India.

In the meanwhile Tesla and Elon should engage more with the Indian users on social media, dropping in teasers and updates about the vehicles being developed. This will ensure that the people remain excited about the company when the new lineup is launched.

It is up to Tesla if they want to be successful in India or pack their bags within a few years like GM.

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I agree with the sentiment that whatever the outcome it will indeed be spectacular 😆

Replying to

Thanks Itab. Of course it has to be spectacular, it is Elon :P

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