The entry of Tesla into the Indian automaking industry doesn’t come as a surprise. After all, as much as the company is based in the United States, it is the best of its kind. The rest of its counterparts have a long way to go to be where Tesla is, which is why one can’t help but wonder how it will change India’s market. It is important to note that India’s electric vehicle sector is snowballing. Despite that, it is not yet advanced. Here are insights into how things could turn out following the invasion or, rather, the introduction of new competition.
Interestingly, the change may be negligible at the beginning. That’s as a result of the fact that the country’s electric vehicle is still in its early stages. At the moment, only tier-1 cities seem to be enjoying it, and it is more of a luxury to the rest of the country. There is also the import issue whereby carmakers have to import the likes of batteries. Consequently, they have to sell it at a relatively high price. Due to the high costs, the massive adoption of hybrid and electric vehicles has proven difficult in India. Going by the 2019/2020 financial year statistics, India is still lagging behind, no doubt. It only registered about 5 lakh units, and the sales were about 5,000 during the entire year.
Buyers shouldn’t expect much change in terms of price. After all, Tesla will be importing completely built units initially, and given the import levies in the country, the price will also be high. As a matter of fact, the company will have to increase its EV price by 100% to make a profit given such expenses.
However, as time goes by, its existence in India will change the entire electric vehicle ecosystem. The research and development center that Tesla plans to set up will make it possible for the company to identify engineering professionals in the locality. Equally important, it will stop importing entirely built units and instead manufacture them within India’s boundaries. Those will be the game-changers. From production to the market to the supply chain, India’s electric vehicle industry is bound to change eventually. The competition and future collaborations will be key drivers.
Currently, the market only has lakhs, which shows a lack of diversification. Tesla will offer varieties, and the other manufacturers are likely to follow suit. Boosting innovation will also change this market, no doubt. If the country manages to manufacture Li-ion batteries locally, the cost of electric vehicles will drop drastically. Consequently, more people will afford them, and the market will most likely take a twist.
How will welcoming Tesla into the Indian Electric Vehicle Market Impact the Current Situation?https://clarkcountyblog.com/