Tesla will begin operating in India in “early” 2021, a top Indian minister said on Monday, a day after the tech-centric carmaker said it was confident it would enter the world’s second most populated market next year.
Tesla’s operations with begin with sales in early 2021 and then “maybe” look at assembling and manufacturing vehicles in the country, India’s transport minister Nitin Gadkari told newspaper Indian Express. How early? Definitely not next month, Tesla CEO Elon Musk tweeted over the weekend.
Tesla has for years expressed interest in expanding to India. But in a 2018 tweet, Musk shared that “some government regulations” in India had emerged as a roadblock.
Like elsewhere in the world, Musk has amassed tens of millions of fans in India. A handful of people paid the token amount of $1,000 to pre-order the Model 3 in 2016. Musk later blamed the local regulations for the delay in bringing the cars to customers in India.
“Maybe I’m misinformed, but I was told that 30% of parts must be locally sourced and the supply doesn’t yet exist in India to support that,” he tweeted in 2017.
There are automakers operating in India. Maruti Suzuki, Hyundai, salt-to-steel giant Tata, and Mahindra currently command the auto market in India. In the past two years, Tata Motors, Hyundai, Morris Garages and Mercedes have launched new electric car models in the country, including the Mercedes EQC and Tata Nexon EV.
Tesla has long focused on expanding global sales and today has showrooms in Australia, Canada, China, Japan, Mexico as well as throughout Europe as well as a final assembly facility that opened in 2013 in Tilburg, Netherlands. However, it wasn’t until 2019 that the company began producing vehicles outside of the United States. In late 2019, Tesla started producing electric vehicles at its factory in Shanghai. Tesla is constructing another factory in Berlin as well as in Austin, Texas.
India has emerged as one of the world’s largest battlegrounds for American, South Korean and Chinese firms, that are looking at the South Asian market to expand their user and customer bases. Facebook and Google, both of which identify India as their biggest market by users, wrote multi-billion checks to Indian telecom giant Jio Platforms this year, for instance. Apple has ramped up its local production in the country in recent years to secure a larger smartphone market share — more than 70% of which is currently commanded by Chinese smartphone vendors.
New Delhi, which has claimed to abolish more than a 1,000 “archaic laws” in recent years, has previously acknowledged the pain points expressed by Musk. In the past three years, India has proposed billions of dollars in incentive to car companies to switch to electric alternatives and accelerate innovation and manufacturing of batteries in a bid to reduce its spendings on oil and curb air pollution.
India also proposed to ride-hailing firms Uber and Ola to convert 40% of their fleets in the country to electric by April 2026. It stated that the ride-hailing giants must convert 2.5% of their fleet of cars by 2021, 5% by 2022 and 10% by 2023.
Indian ride-hailing firm Ola, acquired Amsterdam-based Etergo earlier this year, said this month that it plans to invest about $327 million to set up “the world’s largest scooter factory” in the Southern Indian state of Tamil Nadu, which it said will be able to create 10,000 new jobs and have an initial capacity to produce 2 million electric vehicles in a year.
Earlier this year, a proposal drafted by Indian Prime Minister Narendra Modi-backed think tank Niti Aayog said the country could slash its spendings on oil import by as much as $40 billion in the next 10 years if electric vehicles were to be widely adopted.
Gadkari told the Indian newspaper that he is hopeful that India will emerge as the No. 1 manufacturing hub for auto in five years.