Tesla’s India entry to boost domestic EV market, say experts

Tesla’s foray into India is sure to boost the country’s electric vehicle market and drive local manufacturing, experts shared during an interaction with CNBC-TV18.

“Tesla’s entry will create so much noise in India that it will give an impetus to the Indian electric cars market. The more players that come in it will give more confidence to both companies and buyers,” Shirish Chandran, editor of Evo India magazine, said.

What about local carmakers? How will it affect them? “Tesla will probably offer something that is not there in the market yet. Their entry-level model is going to start in the range of Rs 25 lakh to Rs 30 lakh. It might give competition to the high-end models of Tata Motors and Mahindra, but overall it will benefit the Indian market,” Chandran said.

He added that the current slowdown faced by the EV market needs some push and Tesla could be the answer for that.

The growth of EV adoption is at 2 percent and it has been plateauing for some time now. Gagan Sidhu, director at the CEEW Centre for Energy Finance, believes that Tesla would provide that much-needed push to the domestic market.

“We are at an early stage in the EV age… The market is growing but it has not penetrated the levels the government is planning by 2030. So far the EV space has been led by two and three-wheelers, and e-rickshaws. The four-wheeler segment has lagged till now for various reasons such as lack of charging infrastructure and new models. Tesla coming in could certainly boost the availability of choices,” he said.

The US-based company has reported some weak sales numbers and has also announced laying off 10 percent of its employees. Will it affect the Indian market as well?

“The global adoption rate is at a much-advanced level compared to ours. We still have a long runway before slowdown in the EV market affects us,” Chandran said.

Tesla have joined hands with Tata Electronics for the procurement of semiconductor chips for the US-based company’s operations as it eyes local sourcing of components, according to a report by the Economic Times. The firm is in talks with various state governments in India for a manufacturing plant ahead of billionaire Elon Musk’s meeting with Prime Minister Narendra Modi.

India has also announced a new electric vehicle policy under which the import duty for e-cars have been reduced significantly, incentivising foreign EV makers such as Tesla.