India has become a key growth market for cars. The “Make in India” government push is a factor. Green energy transformations and brands are key. Makers look to India as not saturated by brands for electrics. Tesla continues to talk to the Indian governments about selling in India.
Tesla does not have a manufacturing or assembly plant in India. The tariffs on imported Tesla vehicles are so high as to make the luxury vehicles missing in the market. The manufacturing model includes substantial vertical integration and high levels of automation. The Indian government wants Tesla to take on more local partners, local suppliers, and commit to high levels of employment in return for entering the Indian market. Tesla’s reported responses are focused on their unique relationships with key suppliers (such as for batteries) where there are no Indian suppliers. The sophisticated supply chains for raw materials, spare parts, manufacturing expendable supplies, and facility infrastructure are not yet mature in India.
For Tesla the comparison is between India, Germany, China, and Mexico. The calendar time to create agreements, build the factory, and begin operations at scale is seen by Tesla as taking a long time. Moving operations to scale in the Texas and German Gigafactories has taken much longer than the optimistic schedules – and cost enormous amounts of monies.
Besides India, Indonesia has made offers to Tesla, using local nickel mined raw materials, to bring a large scale manufacturing operation with a primary eye to export. The Mexico Gigafactory will expand production and lower costs for projected low cost models primary for export. There are significant doubts the supply chain, electric power, water, land, and raw materials supplies can be rapidly resolved in India.
For context, Tata Motors, selling 538640 vehicles in FY2023 (ending March 2023), also sells electric vehicles. These reached 50000 EV’s in FY2023 with highest monthly sales of 6509 in March 2023. This is growth from EV sales of December 2021 of 2255, and December 2020 of 418. Tesla in the Gigafactory Berlin grew from no-sales to more than 5000 per week in the same period.
In our next release EkaLore looks at the Indian foreign direct investment restrictions in place.
For more analysis and notes see more at http://www.ekalore.com
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