Is Tesla really coming to India in 2021?
One tweet from Elon Musk and there are already reams of articles on how Tesla is going to come to india in 2021 and change the EV ecosystem. This shows the magnitude of influence that Elon Musk has on the EV world and rightfully so. Hats off to that legend, whose sneeze can make or break 'billions of dollars and millions of hearts'. While I will be the first one to applaud the day Tesla enters India, it is important to have a context to where this all started and to have a studied view on what will it take for Tesla to come to India.
“Next year for sure,” Musk said on Twitter in reply to a post by TeslaClubIn, with a photograph of a T-shirt with the message “India wants Tesla”. This tweet on Friday, 2nd Oct was eagerly consumed as a formal announcement by Tesla to make a foray into India in 2021. "Thanks for waiting!" is what Elon Musk added.
The earlier Tweet:
Going back in time in March 2019, when someone on Twitter had asked Elon Musk “What about India sir?”, he had responded “Would love to be there this year. If not, definitely next!”. That was in 2019.
These two tweets do show Tesla's intent to come to India; earlier the better. But it definitely does not define an imminent year or date. Now, what some of the challenges that Tesla will have to overcome towards its India ambitions.
Adoption: First of all, it is going to be a long and bumpy ride for an EV manufacturer in India. The EV pioneers at Mahindra, Tata Motors, Hyundai, MG, Ather, Bajaj, Ampere and many other will testify to the grind it takes as compared to the smooth and fast adoption of new technology in North America and Europe.
Affordability: At today's import tax rates for EVs, the lowest cost Tesla available in Europe will land in as a premium segment vehicle by the time it reached Indian shores. Even if the government decides to support, it cannot be seen as providing differential rates of taxes for Tesla as compared to other companies. This brings us to the next question of 'Localisation'.
Localisation: In other words, local manufacturing in India is what the GOI will expect from Tesla. Localization will also be a key factor to bring down the tax component and overall prices. But this is far easier said than done given that more than 40% of the cost of the EV is the batteries. If Elon Musk had tweeted that he would be setting up a battery Giga factory in india, that would have been a far bigger and more sensible reason to celebrate.
Models: I am referring here to the business models rather than the vehicle models. Given the higher upfront cost of EVs (this point is slightly different than affordability and refer to the inherent price comparison rather than TCO), Tesla will have to find an alternative way to get more EVs into the hands of the users. Having broken away from the traditional mould of vehicle sales like dealerships, zero marketing, breaking another challenge will not be too difficult for the Tesla team. But a challenge is a challenge nonetheless.
Road Infrastructure: I rest my case with the picture to this article and the link to a simple reality (https://mumbaimirror.indiatimes.com/mumbai/cover-story/state-flunks-potholes-test-receives-rap-from-supreme-court-panel/articleshow/68143930.cms)
Charging Infrastructure: This is the simpler of the problems to solve given that Tesla installs it own super charging infrastructure and secondly 70% of the Tesla charging happens at homes and not on the supercharging grid. Also, given the increasing number of Charging infrastructure players in the Indian EV ecosystem, getting this up and running should be lesser of a challenge that the others.
Regulations: This probably is going to be the biggest challenge and the most unpredictable. A businessman would be well confident with slow but sure steps rather than fast but unsure policies.
So in summary, India is eagerly waiting but I believe the long wait is still not over...and I hope i am absolutely wrong.