After the electric car revolution in America, Europe and China, India is ready to witness EV automakers battle it out over the top spot. With Tesla’s entry into India confirmed, the Union Minister of Transport, Nitin Gadkari, plans to leave no stone unturned to woo the American EV maker with exciting rewards.
Recently Gadkari extended the olive branch by saying that the government is ready to offer incentives to guarantee that Tesla’s production cost remains the lowest in India.
“Instead of just assembling cars in India, Tesla needs to start assembling entire products in India by hiring local vendors. Then we can give concessions,” said Gadkari.
The haste to start production of the world’s most popular EV in India is due to the country’s ever-growing levels of pollution. India is home to some of the most polluted countries in the world. These cities are home to millions of Indians, and hence the growing level of pollution within them represent an impending crisis.
Tesla’s solution of long-range electric cars, with battery range starting from 420 km on a single charge, has proven a perfect catalyst for getting people to embrace electric cars in India.
The government hasn’t yet detailed the incentives, but it is eager to offer them. The news comes weeks after Tesla registered its office in Bengaluru, Tamil Nadu.
There were also rumours of Tesla opening a production facility really soon. According to experts, Tesla plans to release its most affordable EV, the Model 3 Standard Range Plus, in India.
However, Tesla isn’t the only one that’s going to compete in the Indian EV space. The country’s own Tata Motors has a strong contender and is currently planning more of them to ignite the Indian EV revolution.
With Tesla, Tata and the Indian government in the mix, the domestic EV market becomes very exciting. Therefore, here’s all you need to know to get up to speed.
The Inevitable Battle
The Indian EV landscape is a lot different from the global one. In consumer tech, only those brands that have adapted to the vastly varied Indian landscape have survived. Apple struggled for years to understand the Indian audience, but with the launch of their “budget offerings” that now includes the iPhone XR, the iPhone SE, and the iPhone 11, they saw tremendous success.
The same is true for the automotive industry. Indian specific products like Ford Eco Sport, Renault Triber, Nissan Magnite etc., have received near perfect adoption from the Indian audience.
However, when we talk about the Indian EV landscape, things are relatively more complicated. Electric cars in India are still in their infancy. Although there were time periods in the market when electric cars became the town’s trend, the current need for EVs is more out of dire necessity than anything else.
However, the audience’s resistance towards EV adoption has remained the same throughout the recent time period. Several Indian cities still lack the basic charging infrastructure for electric cars. And speaking of electric cars, there aren’t as many options in this category as the conventional one.
Additionally, despite their higher cost, EVs in India can travel less distance on a single full charge compared to a similarly sized petrol vehicle with a full tank of fuel.
Despite these challenges, EVs has been very well received in India. For instance, Tata Nexon registered a 143% YoY growth in Jan 2021 since last year.
With a starting price of Rs. 13.99 lakh (ex-showroom), Tata Nexon is also relatively affordable in a product segment where a similar vehicle’s price can go as high as Rs. 25.30 lakh (ex-showroom).
Tata has tried its best to cater to the impossibly diverse Indian landscape, and the same is visible in its stock price. In a span of five months, Tata’s share price rose to 140%. The growth is majorly due to an overall strong and competitive product portfolio.
Similar is also the story of Tesla. The automaker has been on the brink of bankruptcy twice but has managed to revive itself with some outside help. They are currently the biggest EV automaker globally and have been profitable for the last four quarters.
The market valuation of Tesla is more than Walmart’s; however, it is still not included in the S&P 500 list. Still, the EV maker continues to grow bigger. Tesla already has several competitive products in its stable. However, the 2021 refresh for Tesla cars was probably one of the biggest.
Tesla CEO Elon Musk announced the latest version of their most luxurious car, the Plaid Model S, during the battery day. With a 0-100 km/h acceleration time of 1.9 seconds, it became one of the world’s fastest production cars.
But the breadwinner for Tesla continues to be the Model 3. And the ultimate goal of Elon’s long term plan has always been to make a very affordable EV that could be sold on the global market. As a result, on 22 September 2021, Tesla announced the Model 2, allegedly priced at $20,000.
I believe it’d be the car that brings nations like India, Vietnam, Thailand, Pakistan etc., to the forefront of the EV revolution.
All of this leads down to a path where the global EV maker will eventually collide with the homegrown one. Needless to say, it’ll be an interesting match to watch.