One of US’ topmost valuable company Tesla is all ready to set foot into the Indian automobile market and Indians have been nothing but ecstatic about it. According to the company’s regulatory filing, Elon Musk’s Tesla has registered under Tesla India Motors and Energy Pvt Ltd with RoC Bangalore, as an unlisted private entity with an evident paid-up capital of Rs 1 Lakh.
The beginning of 2021 has brought in some pretty good news for the electronic car giant Tesla and its co-founder Elon Musk, including overtaking Facebook in the race of most valuable companies and Elon Musk became the World’s richest person. The news of Tesla’s market expansion in India has to be one of its celebrated feats too. Even though the world’s richest man, Elon Musk, had been dropping hints of setting up a unit in India, Union Minister Nitin Gadkari last month confirmed the news by affirming that Tesla will be starting its operations in the country from 2021 and would also look at setting up manufacturing unit based on demand. Well, it’s 2021 and we have Tesla entering the Indian market, developing its R&D and manufacturing unit in Karnataka of Bangalore.
The world’s most valued car maker, Tesla, with its main office in the heart of Bangalore’s central business district has named Vaibhav Taneja, Venkatraman Sreeram and David Join Feinstein as the directors of the incorporated entity.
Another good thing about this is that if the company remains below the import limit of 2,500 units, prices could be cut down significantly with a margin of Rs 55-60 Lakh under full cost and about Rs 35-4p Lakh under the limited import rule.
However, contrary to expectations, Indian auto major Tata Motors denied joining ties with the American giant for its Indian foray. In a regulatory statement issued by the Tata motors, they said, “Tata Motors has not taken any decision regarding a strategic partner for its PV business and categorically denies any and all rumours suggesting the same.”
Indians however have welcomed the company with arms wide open. If you want to know-how, go to any social media platform that you use and see for yourself the feed flooded with memes on the news. This is our way of showing love, isn’t it? But it can’t be denied that the country’s challenging regulatory environment is still as big a concern as it was back in 2018 when Elon Musk cited reasons to not foray into the Indian automobile market. And well, we can’t say the internet held back from pointing towards the conditions of bumpy Indian roads and unregulated road environment. Be it referring to the unexplainably packed roads with traffic or potholes in the middle of the roads, memes found their way through it all. The unending traffic and not-so-good roads will definitely pose a threat in the ‘auto’ mode of the electronic car and we’re all eyes to see how all this would work out. Nonetheless, it’s going to be an amazing journey and we’re thrilled about it.
However, there’s more to the picture than we can currently see- What impact would Tesla’s entry in the Indian automobile market have on India’s automakers?
On a brighter note, Tesla’s entry in the Indian automobile market is said to give a push to the electronic vehicle segment. This is expected to result in a boost in demand for batteries and thus, more opportunities in different aspects of the industry, not only limited to manufacturing but for research and development too. Not just that, when a company as renowned as Tesla steps foot in a country, it brings along global name and hub of opportunities. It is expected to keep the Indian market in global talks and might act as a good source of advertisement for India’s ambition to become the global manufacturing hub, especially in the electronic vehicle industry.
However, looking at where we’re standing right now, India is not yet ready for electronic vehicle infrastructure and it is bound to take a good deal of time to realise that ambition. The journey would be a long one with destinations like the establishment of a wide network of vendors, software infrastructure, research and development, and testing to reach the end of the tunnel.
Since the original costs of the initiating model range within Rs 55 Lakh, the threat to domestic original equipment manufacturers is close to none, as per a report presented by the Senior Research Analyst Mr. Ashwin Patil. In hopes of Tesla’s entry bringing an electronic vehicle revolution in the industry in India, it is important to take into account the battery costs and affordability factors that might act as dampeners from the customer’s viewpoint. Therefore, it is crucial to target the destination and create the roadmap to it right on time.
Since there’s not much clarity on the mode of manufacturing for Tesla’s electronic vehicle unit in the country, no heavy impact on the Indian auto industry and domestic producers in the short and medium run. However, commenting on the long run with partial information might be a little unfair and hence, we would restrain ourselves from it. The less impact in the medium run can also be credited to the fact that unlike mobile vehicles that cost fairly within Rs 10 Lakh, Tesla’s vehicles., as and when they set foot, will cost about Rs 55 Lakhs.
Nevertheless, it would be really interesting to witness the future unfold within our eyes as the problems we can list at the moment are endless and solutions are still to be found. However, whatever and however it all turns out, it cannot be denied that it would be huge and we’re on our toes to see it.