Can Tesla's entry in India drastically improve the country's electric vehicle industry?

By Souvik Das | Published on 08 Feb 2017
Can Tesla's entry in India drastically improve the country's electric vehicle industry?

Responding to a tweet, Tesla CEO Elon Musk stated his hopes are high for introducing the much-fancied all-EV company to India this summer. Much work, though, remains if that is to materialise.

Seventeen hours ago, Tesla CEO Elon Musk responded to a Twitter user's query, stating that the much-fancied all-electric vehicle company may actually introduce itself in India this summer. While Musk did indeed stress on the fact that he's still only "hoping for" the launch and nothing is really confirmed yet, it was enough to have all of us excited at the prospect of having Tesla's futuristic automobiles prowling along Indian highways. The move also seems highly probable, as the Government is pushing heavily for electric vehicles to promote zero emission and a network of Smart cities. However, no further particulars of this deal has been disclosed so far, although now that word is out, we do expect to hear more about the same from either the Government of India, or Tesla itself.

There are, though, a number of factors that need to be considered before we get all excited at the prospect of driving a Tesla Model 3 on Indian roads, real soon. First, the company will need to establish a service network for its vehicles across major parts of the country. While the Model 3 is interestingly up for preorders for India already for just $1,000, the company will be required to set up a robust network of service centres in India, before the cars can be viable for plying in the country. The second criterion is the presence of charging stations. Called Supercharger stations, these are capable of charging a Tesla car by up to 270km in range in 30 minutes, and fully charge it up in one hour and 15 minutes. Right now, although the Indian government is intent on promoting electric vehicles, there is no electric charging station network to really support such vehicles, and the advent of Tesla in India may actually lead to the establishment of a much-needed service in the country. It is interesting to note that Musk has previously expressed his interest in setting up a Supercharging network in the country for potential customers in the future, although no further information on the same is available as yet.

The Tesla Model 3: Headed to Indian roads?

Musk has also expressed interest in establishing a Gigafactory - a Lithium-ion battery manufacturing plant - in India. While further information on the same is awaited, the Government's policies on electric automobiles may fall in line with the same, and this can also allow Tesla to export its battery produce from India. Industry estimates on manufacturing and labour costs out of India state that this may bring down the cost of Tesla's batteries by as much as 33 per cent, which should significantly affect production expense as the battery is the single most expensive element of an electric vehicle. Another factor to be taken into consideration is the price of each vehicle, which would drastically increase as all Tesla cars would be imported as Completely Built Units (CBUs), and there are hefty duties on CBUs in India. While this would make the Tesla cars considerably more expensive in India than in foreign lands, the company is likely to enjoy certain rewards if it sets up electric charging networks and manufacturing plants of key components in the country, or other similar deals.

"It seems highly improbable that Tesla's famed autopilot will really work in India"

India has much to gain in terms of infrastructure and the evolution of its automobile industry if Tesla does make its way to India this summer. Apart from battery manufacturing plant(s) contributing to the country's Make in India plans, the establishment of electric charging stations and the presence of more electric cars will raise awareness and scope of owning electric vehicles - an eventual target that even Tata has in sight for commercial vehicles.

Unfortunately, though, it seems highly improbable that Tesla's famed autopilot will really work in India. After all, even if charging stations, service centres and battery plants are established soon, it will be a while until we really start obeying traffic rules to the hilt.

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