Technology: With the Indian economy rising, Tesla Inc. renews efforts to enter
Virendra Pandit
New Delhi: As India, the most populous country now, shows healthy signs of post-pandemic economic recovery, the Elon Musk-led Tesla, Inc. has renewed interest in setting shop in the South Asian country whose economy is seen as rising at around 6.5 percent, among the world’s highest, this year.
According to the media reports, a team of senior Tesla officials is visiting New Delhi this week to explore an alternative to its Shanghai manufacturing facility in China. Like other multinational corporations, the US-based electronic vehicle (EV) maker is also exploring new supply chains to diversify beyond China.
The Tesla team will meet government officials and also those from the office of Prime Minister Narendra Modi to discuss local sourcing of components, one of the key conditions put forth by New Delhi as part of its “Make in India” initiative.
In recent months, Tesla’s attempts to enter India did not succeed and Musk criticized New Delhi for high import duties, its EV policies, and its insistence that the US company must not sell China-manufactured cars in India as New Delhi has a long-time border dispute and other issues with Beijing.
If Tesla agrees to source components from India, New Delhi can also warm up to let it enter the country which is striving to emerge as a USD 5 trillion economy this decade.
Unlike Tesla, its global rivals like Mercedes-Benz AG are selling locally-assembled automobiles. They are also betting on increasing demand for EVs in India whose automobile market has a high growth potential.
So far, Tesla has insisted that it should be permitted to first sell and service its vehicles before it considered making India a base for assembling cars as well.
Recently, however, some major US companies have warmed up to the Indian market and pivoted beyond China in view of rising trade tensions between Washington and Beijing.
iPhone-maker Apple, for instance, has made India an alternative manufacturing base beyond China and now produces nearly 7 percent of its global smartphone output here.
At present, Tesla dominates the US EV market with a share of more than 50 percent.
