Sunday, September 20, 2020

Tesla in talks to set up research facility in India-Will it happen?

Tesla cars have not come to India so far. There has been huge speculation that it might introduce its electric car to the Indian market soon. Be that as it may, for there is now the possibility of Tesla setting up a research facility in Bengaluru, the capital of Karnataka.

According to a news report in the Economic Times, "Tesla held exploratory discussions with Karnataka government officials on September 10, who are seeking a possible investment by the world’s most valuable carmaker in a research facility in Bengaluru".

Tesla is reportedly interested in the idea, and to further woo it the Karnataka State officials are to meet again with the Tesla team again later this month.

Tesla, it should be said here, does not have a similar facility outside of the US as of now.

Tesla's India gambit

Tesla's India gambit may not be just a media rumour. One, Elon Musk, the mercurial and maverick Tesla CEO had already talked of his company's much-talked of cars making it to the Indian market. But the thing that is precluding that move is India's high import duties for such luxury cars. Musk tweeted as much last year.

But things seem to be different now.

India is looking at the EV (Electronic Vehicles) market with renewed interest. Nitin Gadkari, the Union Minister for Road Transport & Highways and MSMEs, recently said that in the next five years, India will become a manufacturing hub for electric vehicles. 

He said the government is trying to extend best possible concessions to this sector, and has lowered the GST on electrical vehicles to 12 per cent.

Another thing is, with the world a bit wary of doing business with China, where Tesla has a Gigafactory, India is planning to take advantage of the change in the global scheme of things.

Tall order for India

To talk of taking up China's place is one thing, but to actually pull it off is another. For, China went out of the way to take Tesla to its shores. For instance, in China, Tesla's Model 3s is exempted from the 10% sales tax and its also gives a subsidy of around $3,500 on each car. Also, Chinese banks have pumped in money to help Tesla take the land for lease in Shanghai for its Gigafactory.

India's target for EV sales penetration is 30% for private cars, 70% for commercial cars, 40% for buses, and 80% for two- and three-wheelers by 2030. This is a tall order as of now. EV sales, excluding e-rickshaws, in India grew by 20% at 1.56 lakh units in 2019-20 driven by two-wheelers.

So, India needs to do a lot more in attracting companies like Tesla to put money where their mouths are, as it were.

The research centre in Begaluru, if at all it happens, may however herald a major phase of change in Indian automobile history.  

Via: Economic Times



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