Since Tesla launched in 2012, the company has established a presence in North America, Europe, and parts of Asia. Tesla had plans to launch in India in 2017. However, they couldn’t launch due to the strict localization norms in the country. But due to the increasing calls for electrification in India, the norms have been relaxed since then. India is the fastest-growing car market in the world and Tesla is interested in a piece of the pie. Tesla is entering the market with the Model 3. According to a report by Indian Express, the transport minister Nitin Gadkari confirmed that Tesla will start operations in the country early next year.
Tesla launching in India
There are many fans of the company in India. However, due to the aforementioned strict rules and regulations, the company delayed its launch in India. This time they are likely to launch the Model 3 at a base price of INR 55,00,000 (approx. USD 75000). This is twice the cost of the same car in the USA. This is because Tesla is importing the cars as Completely Built-Up (CBU) units. Unlike other luxury brands, which assemble the cars in the country, Tesla has decided to choose this path. While the amount of taxes levied on such cars increases, it allows the company to retain the customization options.
Legacy brands choose to assemble cars in India because of the price sensitivity of the market. However, Tesla sets itself apart from these brands because of the amount of tech on offer in the cars. On top of that, Indian customers want a brand that devotes itself purely to the EV market. While plenty of Indian manufacturers like Tata and Mahindra are improving their EVs, none of them have a well-defined EV setup like Tesla. This gives Tesla an upper hand even before they have entered the market.
Where will Tesla fit into the market?
Globally the Tesla Model 3 competes against the Volkswagen ID.3, the Chevrolet Bolt, and the Audi A3 Sportback e-Tron. However, due to the higher price of the car in India, it will end up occupying the same space as the Mercedes E-Class, the BMW 5 Series, the Jaguar XF, and the Lexus ES350H. These are cars that offer more in terms of luxury. But the Model 3 will definitely outperform these cars in terms of features and performance. The green image of the brand will also attract potential customers. However, considering how the Indian market prefers its cars to give more in terms of size and luxury, it will be interesting to see if the Model 3 can hold its own in front of all these well-established brands.
How well can Tesla do in India?
Tesla has all the ingredients to make it in India. It has a reputation around the world, it has a well-defined market position in other countries, a product that is different from others, and an aura that makes it a very enticing option for Indian customers. Indians know Tesla and they have been longing for the entry of the American brand. This makes this news very exciting for the people from India. This could be the shot in the arm that India needs so that the EV market gets kickstarted.
