Earlier this year, automotive enthusiasts in India got a pleasant surprise when Tesla announced its entry into the country. The news was confirmed by Elon Musk as well as Karnataka CM and Union Minister Of Road Transport, Nitin Gadkari.
Without wasting time, Musk, earlier this year registered the company as ‘Tesla India Motors and Energy Pvt Ltd’. with its headquarter set in Bengaluru, Karnataka. As per unconfirmed reports, the brand will first launch its premiere Model 3 electric sedan which will be a fully imported car brought via the CBU route.
Reuters has revealed that Tesla has hired Manuj Khurana, for its India business development. Khurana is a former executive of Invest India, a body that has been formed to bring global investments to India.
In the first phase for India, Tesla has plans to setup showrooms in Mumbai, Delhi and Bangalore. These showrooms will be about 20k-30k sq. ft. each and will also house service center. It is not clear as to which will be the first city of the three to get a Tesla dealer showroom in India.
Last month, Karnataka CM, BS Yediyurappa confirmed that Tesla would set up a local assembly plant as well as an R&D facility in the state. The company is currently scouting for a suitable location to set up this facility in the suburbs of Bengaluru and is in talks with local officials for the past six months. As per some reports, the EV manufacturer is close to inking a deal with local administration.
With manufacturer’s given various concessions on developing and producing electric vehicles in India by the government, questions did arise whether the Indian Government would extend the same courtesy to Tesla. In relation to this, Union Transport Minister, Nitin Gadkari, said that the government is willing to offer greater incentives to Tesla when it sets shop in India. Although it suggested the carmaker to completely build the cars in the country rather than just assembling them.
In return, Gadkari assured that the government would ensure that production cost of Tesla cars would be the least, when compared to the rest of the world including China. India is currently looking to boost local manufacturing of electric vehicles (EVs), batteries and other components to cut costly imports and curb pollution in its major cities. Hence, it is offering grand incentives to all EV and battery makers in the country.
Further adding to the context, Gadkari claimed that India could become the future export hub of EVs since 80 percent of components for lithium-ion batteries are being made locally now. This development comes amidst tough competition from various countries trying to woo global EV makers in local manufacturing and working towards reducing carbon emissions.
However, there are many hurdles in India before Tesla commits to manufacturing locally. India’s EV market is still at a very nascent stage with only 5000 electric cars sold last year out of a total 2.4 million cars. Also, charging infrastructure is close to negligible. According to certain reports, the government is drawing a production-linked incentive scheme for EV and EV-related components in addition to setting up advanced battery manufacturing units.
The Union Minister signed off by saying he also wanted Tesla to get involved in building an ultra high-speed hyperloop between Delhi and Mumbai. Tesla’s entry into India could also lure other foreign EV manufacturers to set up shop in India and explore the potentially big EV market in India.