The automotive industry in India is going through changes in terms of tech-based car sales. The country has a large portion of its human resource and labor workforce working for technological companies. Automakers that exert their efforts in enhancing car features in aspects of speed, comfort, and luxurious design, has failed to impress the Indian market with these upgrades.
Tesla has been constantly upping their game in electric vehicles, still holding the title for leading EV maker in the world. Also, it has been integrating software-based technology into its car systems. The import of Tesla products to India has not been smooth due to the country’s strict policies and regulations, but recent reports have suggested that Tesla may be planning to seal a permanent deal to establish yet another factory in the country.
Around the Model 3 launching back in 2016, India was one of the countries included in the pre-order for the EV model. There was a surge in responses, signifying the high demand for the brand in the nation. CEO Elon Musk has openly expressed his desire to have Tesla set foot in India for the past year. However, the expense for importing Tesla products to India is a risk that the company cannot afford to take, as it would compromise the pricing for the already-pricey EV brand.
Tax changes in India in 2019 shone a ray of hope for the company to be brought in. It would be a smart move for the economy of India to make an exception for Tesla. The establishment of the company in that country would pave the way for employment opportunities and more income. It would also put the country’s name in a good light for allowing the option for sustainable living. Having Tesla in its midst would benefit the country in a lot of ways. And it may just be already under way.
That same year, India’s government started the plan of building lithium ion battery plants. Tesla has shown its interest in the idea, along with CATL - a China-based battery manufacturer. An amount that equates to 7 billion USD was discussed, and now the proposal has been forwarded to the cabinet. It seems as though the government of India knows the good results of letting Tesla in.
“Large batteries should be brought to the clean energy play to help use infirm power such as wind and solar. We first need it on a large scale to cater the internal demand. All the top global manufacturers, including Tesla, have evinced interest. We will get more clarity once the tender documents are brought,” says a representative of the Indian government.
Elon Musk’s recent twitter responses to questions from brand supporters have led people to believe that Tesla may be working on a Gigafactory based in India. He responded to an inquiry about the expansion of factories in other Asian countries outside of China with a ‘yeah’ and backed it up by saying that there are still 2 factories under development, one in Germany, and a second one in the United States. Arwind Gupta tweeted Musk asking about Tesla’s Model 3, and Musk responded that it should be expected soon.
In a Q2 conference call, Elon Musk let slip that there will be 3 new factories that will be put up in the next 12 to 18 months. It is crystal clear that the two are in Berlin and Texas. The third location is yet to be confirmed but several theories say that it’s India.
India may just be Tesla’s next business expansion opportunity. With the country’s improving economic status, the automotive industry in India is predicted to be on the top three largest global markets. Tesla is in talks of producing a compact car that works well for the crowded streets of India and its affinity for low-cost automobiles. With a battery plant on the rise, Tesla won’t be spending a lot on logistical costs for assembly and procurement of materials. The future is bright for Tesla and India.