After a long wait, India's Tesla dreams seem to be finally shaping up. It has been reported that the company is now scouting for space in three different Indian cities to open its showrooms.
According to a report (opens in new tab), the leading electric car company is looking for commercial properties as large as 20,000-30,000 square feet in Delhi, Mumbai and Bengaluru. These properties will work both as the showroom and service centres. The company expected to import and start selling the Model 3 car in the country.
Tesla had recently set up an entity in India thus giving a hint that the company is indeed looking to make its much-awaited debut in the country. Earlier, Tesla’s CEO had also tweeted that the company will start operating in India in 2021.
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In a related piece of news, Tesla has already started recruiting senior executives in the country. It has been reported that Manuj Khurana, former AVP at Invest India, is the first executive to join the company. While his LinkedIn profile hasn’t been updated yet, but his recent post (opens in new tab) on the professional network talks about him taking “a super exciting role.” According to sources at Reuters, Khurana will lead Tesla’s policy and business development efforts in the country.
Earlier it was reported that the Indian government was keen on getting Tesla in the country. The Narendra Modi led government has also reportedly dished out strong subsidies to Tesla inviting the American company to set up its manufacturing operations in the country. The Union transport minister has gone on record to state that the government will ensure that the company “can get the lowest production costs across the globe.”
Tesla, on the other hand, has hired global property consultant CBRE Group Inc to help them scout for locations that can offer the company easy access to its target customer base. One of the sources who prefer the conditions of anonymity stated that Tesla’s India showrooms will be similar to ones that are present overseas but with slight customizations based on the local requirements. Globally these showrooms act as an experience centre for the customers showcasing various products offered by the company.
Road ahead could be bumpy
While Tesla is moving at a fast pace in India, the road ahead for any electric car maker isn’t going to be easy. The current infrastructure that includes public charging spaces is at a nascent stage. Further, the government policies have not been transparent and that has been a major roadblock in India’s EV journey.
The government is said to be working on a new policy from the ground up that aims to offer better support for the EV makers and aims to incentivize them based on their performance. This policy hints that the government is focused and moving aggressively to make India a hub for electric car manufacturing, however, it will still need to ensure better coordination with the state governments to pass on the various benefits to both the automakers and the customers.
Further, the Indian EV market is extremely small in comparison to other major global markets. Last year itself, out of the total of over 2.4 million cars, only 5000 electric cars were sold in the country. This shows that the market is still far from mature for EVs. Additionally, Tesla is targeting an affluent user base and isn’t aiming to offer affordable EVs in the country as of now, which further narrows down the scope.
However, looking at the positive side, if Tesla comes to India and sets up its car and battery manufacturing facilities, we can expect an increase in awareness and availability of cheaper components. This in turn can attract other EV makers to come up with alternates and cheaper electric vehicles.