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Recently, there has been a lot of noise around TESLA (the second largest EV maker in the World), as it is planning to take India by storm.

 

So, what’s the buzz all about?second-largest

 

Before we get there, let’s take a closer look at the domestic non-EV market. 

 

As of March 2024, the sales of Maruti Suzuki, Tata Motors and Mahinda have been ruling the car markets with Maruti Suzuki leading the pack with a market share of 41.3% followed by Tata with 13.6% and Mahindra at 6.8%. The difference is colossal, isn’t it?  

 

But lately, the EV market is showing steady growth. Let’s have a look at the numbers.

 

In 2023, roughly around 4.1 million cars were sold in India out of which less than 2% were EVs. Well, the lower percentage is justifiable because the popularity of EVs in India is still at its infant stage. And most importantly, India lacks the required charging infrastructure for now. Additionally, there is no standardization at charging ports. 

 

To address these shortcomings, the Indian Government has introduced numerous schemes under the flagship scheme FAME - Faster Adoption and Manufacturing of Electric Vehicles. 

 

Let us see how the Government is incentivizing the growth of EV in India

 

In the Union Budget this year, the central government announced several promotional measures like :

Using all these incentives as bait, the government aims to hit two targets with one arrow by reducing the dependency on fuels, thus bringing down the carbon footprint.

 

And, considering the fact that the market in India is huge, more and more EV brands are planning their way in and so is Tesla.

 

Why is everyone eyeing on Tesla? 

Now, you see why there’s so much noise around Tesla lately? Perhaps it’s a marketing gimmick to get the attention of Indians before entering the market. Possible, isn’t it?

 

The world’s second-largest EV maker recently announced that it will use its existing factories to build new and more affordable vehicles before investing in manufacturing lines in India. This means Tesla plans to raise production by 50% to its current capacity of 3 million vehicles using various Indian EV schemes as a ladder. 

 

In the December of FY 2023-24,the company’s annual profits dropped more than 40%. And, the decision of not setting up new manufacturing lines in new factories has led to a 10% increase in Tesla shares despite the dip in sales. 

 

So, penetrating the Indian market will be promising for Tesla considering its recent decline in sales. 

Even if Tesla manages to set up a base in India, it may have to face fierce competition from Chinese EV makers like BYD, MG and upcoming Xiaomi, and Indian EV makers like Tata and Mahindra. 

 

The starting price of a compact EV in India is roughly around Rs. 8 lakhs. So, the key challenge for Tesla will be setting its price range to enjoy higher sales in India. Correspondingly, Tesla cars are expensive, starting from $38,990 and they go up to $1,19,990. That is between ₹32 lakh and up to ₹1 crore! And, luxury vehicles in India make up less than 2% of all the cars. So, Musk will have to be very careful and calculative in deciding the best price of his EVs before entering the world’s biggest consumer market i.e. India.

 

Having said that, let’s look at the 2022-23 Global EV Market Share:

Top EV Manufacturers and their Worldwide Sales in 2023:

Do you think all the noise is worth it?

 

Guess we’ll have to wait and see how Tesla paves its way into the Indian market by the end of this year.

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