The first Tesla showroom in India opened in Mumbai on Tuesday, pushing the world's most valued auto company into a niche market in India. Much hoo-ha has followed since people have gone to window-shop at the Bandra Kurla Complex storefront. The fact is, Tesla is testing the market after talks with GoI over lowering import duties stalled. Additional production in India may not be possible, with the EV-maker facing glut in its plants worldwide. So, Tesla will be competing for the high-end Indian market against luxury carmakers. The mass market for EVs is protected by Indian auto firms that have made inroads into electric mobility. Chinese EV makers, which are piling pressure on Tesla in a bruising price war, are gaining presence here.
Market testing is critical for Tesla, whose cars come bundled with bespoke battery charging infra. India also represents a difficult market for autonomous vehicles, on which Elon Musk is placing a big bet. Prospects of a favourable tax dispensation to test Tesla's products in India brightened with Musk's proximity to Donald Trump. But they now are ex-es who didn't part well at all. India is working on a trade deal with the US that should improve market access for US companies. But Tesla is unlikely to receive special treatment, unless it is willing to commit investments in the country.
Tesla follows Apple in setting up retail touchpoints in India, but their circumstances are in stark contrast. There is a significant market share for iPhones in India, and Apple has set up a manufacturing export base here. The size of Tesla's addressable market is much smaller, and it has export capacities idling. Tesla has a more diversified manufacturing presence than Apple, which is cutting down on its Chinese concentration. Indian policy designed to attract foreign investment will not be equally effective for the two companies. Some degree of customisation is required to get iconic brands to set up production in the country. Tesla could find itself in a better place in India down the road.
Source Name : Economic Times