Tesla set to face many challenges in Indian market

Source:https://www.energybite.co.in/blog-post/tesla-set-to-face-many-challenges-in-indian-market/

US giant Tesla is set to drive its first EV in India in the near future; and that’s a huge positive for electric mobility scenario in the country. But the company is set to find Indian automotive market a hard nut to crack because of a host of factors. Besides high pricing of its models, poor charging infrastructure and road and traffic conditions in India are bound to pose tough challenges before Tesla. To achieve success here, the company must do some rethinking. 

American electric vehicle giant Tesla is gearing up to launch its EV range in India soon. Tesla Model 3 is likely to be the first EV from the top-most brand to land in the highly competitive Indian automobile market. With a population of more than 1.3 billion, India is the world’s second most populous country after China and many international car manufacturers are eyeing the huge Indian market. Tesla’s entry, therefore, should not be much of a surprise. 

But the Indian market is bound to pose many a challenge before Tesla. Although the US giant is likely to be a niche player as the Tesla Model 3 will be imported directly into India as a completely built unit (CBU), its price will be the double that of what is offered in the US. The reason for this is the steep import duties levied in the country, 102 per cent custom duty on a new car and almost 180 pc on a used car. That is quite an enormous burden for any potential customer, more so in a price-sensitive market like India. 

In any case, the uptake of EVs has been rather slow in India. Out of about 2.4 million vehicles sold in the country last year, EVs accounted for a mere 5,000 units. Moreover, the country also lacks a decent EV charging infrastructure. Also, it has almost negligible domestic production of EV components and batteries, which further leads to higher prices of EVs in the country.

• With a population of more than 1.3 billion, India is the world’s second most populous country after China and many international car manufacturers are eyeing the huge Indian market.
• Although the US giant is likely to be a niche player as the Tesla Model 3 will be imported directly into India as a completely built unit (CBU), its price will be the double that of what is offered in the US.
• Tesla is also set to face challenges over the self-automation features of its cars. Road and traffic conditions in the country, though witnessing a change, are not yet ready for the Tesla experience.

Besides pricing, Tesla is also set to face challenges over the self-automation features of its cars. The road and traffic conditions in the country, though gradually witnessing a change for the better, are not yet ready for the Tesla experience. The EV giant’s features like Automatic Lane Changing are unlikely to succeed in India with its ever-crowded roads. To add to that, stray animals, cattle and potholes are a common feature on Indian roads making an average vehicle drive unpredictable. For a high-end EV like Tesla’s, it will be an altogether different ballgame. 

Therefore, to succeed in India Tesla will primarily have to shift its production here as it has done in China. To replicate its China success, the company needs to capture at least 1 per cent of the Indian automobile market. And for that to happen, it needs to do lot of rethinking.