Tesla Enters India: What Are the Economic Impacts

Do you like paying 91 rupees per liter of petrol every time your car runs low on fuel? If not, then we have good news for you! Tesla Motors, the world’s largest manufacturer of electric vehicles (EV) and the largest automaker by market value has officially entered the country. Tesla has registered an office in Bangalore, the technology hub of the country. Tesla is planning to launch the Model 3 this year, which is the most economical offering in Tesla’s product suite. At the start, the cars will be imported from Tesla’s American plant in Fremont, California as completely built units (CBU). Tesla is also reportedly setting up an R&D facility in Karnataka, based on a tweet by CM Yediyurappa.

 

For those wondering, “this stuff sounds great, when can I get my hands on one of these?” the answer is in 2021 itself. Also, the Model 3 will be in the price range of INR 50-60 lakh, due to the high import duty levied on luxury cars, but more than makes up for it with fuel savings and significantly reduced environmental impacts. As Indians, one of our first questions is bound to be “mileage kitna deti hai?” Well, you are in for a treat. A single charge can last up to 420 kilometers, which is perfect for long road trips.

 

There is expected to be a surge in India’s EV market. Tesla’s high-priced car is going to target a very niche segment of affluent individuals, which will drive competition to boost manufacturing of EV’s for the lower income families. There is low expectation of a near term impact on the auto industry since majority of India’s auto sales come from vehicles under the 10-lakh rupee mark. That being said, the market for batteries should see some growth in the short run and much more significant in the long run as India improves its electrical infrastructure. Even charging infrastructure and road infrastructure should improve in the long run as electric cars need charging points for long distances and autonomous electric cars like Tesla need good quality roads to drive on.


Also published on Medium.

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