That electric attraction

Elon Musk has postponed his trip to India because of “very heavy Tesla obligations”. But all the factors making an India-Tesla partnership a win-win for both remain firmly in place.
Wherever Tesla has started its operations, it has helped build a robust EV ecosystem. China is a classic example. India would like Tesla to repeat this here too. On the other hand, Tesla cannot miss out on the India story. This is the world’s fastest-growing large car market.

Growth conditions | Just over 90,000 or only 2.2% of the cars sold in India in 2023 were electric. In contrast, worldwide battery EV (BEV) sales were 10 million or 11.1% of cars sold. So, there is a huge opportunity for Tesla, or any big EV maker, to jumpstart the electric car industry here. Musk has been consistent about where he sees the scope for him to invest in India:

● India is now the most populous country in the world, Musk tweeted in April 2024. So, Indians should have Tesla EVs, which he says are the best cars in the world.
● Solar panels combined with battery storage could power rural India more efficiently. This is Tesla’s fastest-growing business segment.
● Starlink could provide mobile broadband connectivity to India’s rural and remote areas.
Affordability matrix | It is well understood that an affordable car is critical to Tesla’s success in India. This also syncs well with Tesla’s long-term plans. It has announced a goal of further 50% reduction in the cost of building a vehicle as compared to Model 3/Y. It has already outlined a plan to build a $25,000 car (₹21 lakh). And while this plan could be temporarily de-prioritised, it should be ready in around 3-4 years, when Tesla is expected to start building a highly localised car in India.

GOI believes Tesla would give much-needed push to EV ecosystem development in India and also boost its Make In India programme. That is why, when the e-vehicle policy was announced on the last working day before the election code of conduct came into effect, govt agreed to Musk’s long-standing request to allow import of e-cars.

Meanwhile, Tesla has announced it intends to further increase cost-competitiveness in its significant markets by strategically adding local manufacturing.