Tesla's India entry faces timing bug
New Delhi, Aug. 25 -- Is it too little, too late for Tesla in India? The Elon Musk-led electric vehicle (EV) giant's quiet entry into the country through two showrooms in Delhi and Mumbai in the past month-bereft of hype, and with no local senior leader-has been compounded by geopolitical friction between India and the US, and its non-committal approach to local manufacturing.
Its rivals in the premium EV segment note that the Indian market has changed drastically since 2020 when Tesla was first slated to launch in India. "If this was five years back, I would have agreed that consumers will look to move towards Tesla but I think electric cars themselves have moved far in the last five years," Santosh Iyer, managing director and chief executive officer of Mercedes-Benz India, said.
Iyer noted that there are several locally made options for EVs available from Indian and foreign original equipment manufacturers (OEMs), which was not the case five years ago, suggesting that automakers are much better prepared to face competition. "I think time will tell whether the timing was right or it was too late," Iyer said.
In these five years, Mercedes-Benz has launched six EVs such as EQA and EQS SUVs, and BMW has also brought in six SUV EVs such as the i7, i5 and iX, among others. Other luxury brands that have launched EVs in India include Audi (e-tron) and BYD (Sealion 7, Atto 3 and Seal).
Adding heft to the competition is Vietnamese brand Vinfast, which entered India in July-about the same time as Tesla-and has started rolling out cars from its Thoothukudi, Tamil Nadu plant. It is also increasing its dealership presence across the country.Further, experts said the world's second-largest EV maker faces tempered consumer sentiments around American brands following the US administration's recent moves to impose higher tariffs on India.
"The market is very much driven by sentiments and the environment is not as favourable as it was previously for Tesla in India," said Amit Kaushik, managing director at auto analytics firm Urban Science India.
A request for comment from Tesla remained unanswered till press time.Tesla has not helped its cause by not committing to locally assemble its products in India, despite repeated attempts by the government to roll out the red carpet.
Last April, Musk cancelled his scheduled trip to India and went to China instead. During this trip, Tesla was expected to announce an investment to set up a local manufacturing plant in India.
To be sure, Vinfast, BMW and Mercedes-Benz have all set up assembly operations in India to localise their supply chains. Even as Vinfast has set up a new plant, BMW and Mercedes-Benz have been assembling conventional luxury cars in India since 2007 and 1995 in their plants in Chennai and Pune, respectively, and have added EVs to the assembly line in recent times.
The policy environment was also favourable to Tesla earlier, with the government last year launching the Scheme to Promote Manufacturing of Electric Passenger Cars in India-dubbed informally as 'Tesla Policy'-to help automakers import cars initially at a reduced tariff rate with a condition of setting up local manufacturing operations.
However, the company never expressed clear intention to participate in this. While the notification of the scheme took more than a year as the government negotiated a free trade agreement with the US, Tesla has still not made its plans clear about assembling in India.
Tesla's low-key launches in India contrast rivals who go big with new products. Model Y has also restricted its self-driving features in India due to lack of regulatory approval, offering a limited assistance system instead....
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