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India is the next country on the radar of Tesla, Inc. (TSLA) CEO Elon Musk. In response to a query on Twitter, Inc.'s (TWTR) platform yesterday, Musk said he was "hoping" to launch Tesla's electric vehicles in India in summer this year. (See also: Will Tesla Make A Profit In 2017?)
India is set to overtake Germany as the world's fourth largest market for vehicles this year. While a number of auto makers have made a beeline to India in recent years, the market for electric cars is yet to take off in the country. According to research firm Ernst & Young, India has a "few thousand electric cars" in an automotive fleet that increased by 20.5 million in 2016 alone. There are multiple reasons for this, ranging from government bureaucracy to lack of incentives for manufacturers. As a result, Mahindra & Mahindra Ltd. (M&M.BO), part of India's Mahindra Group conglomerate, is the only manufacturer of electric cars. (See also: What Impact Will Growth in the Emerging Markets Have on Automotive Sector?)
The situation has improved in recent times. The Modi government has launched several initiatives to promote renewable energy-related products. For electric cars, the Indian government has initiated the Faster Adoption & Manufacturing of Electric Vehicles in India (FAME) program, which offers subsidies for manufacturers and incentives to customers for the purchase of electric vehicles. According to reports, the government's aim is to electrify the country's entire fleet by 2030. (See also: General Motors Halts $1B India Investment.)
However, Musk faces an uphill battle in capturing the Indian market. He will need to conduct extensive negotiations with the Indian government to begin manufacturing there. As demonstrated by Apple Inc.'s (AAPL) experience with negotiating to manufacture iPhones, a similarly premium-priced product, that could take a while. Even then, the absence of an extensive charging infrastructure and a ready market for its products could play spoilsport with Tesla's ambitions for the Indian market. (See also: Apple Close to Signing Deal With Indian Government.)
Meanwhile, importing vehicles straight from manufacturing plants in the United States might be an option. However, India's high import duties may further increase prices for the already expensive electric cars and further limit their audience. Based on previous reports, it seems that Tesla will enter the Indian car market with its Model 3 sedans, whose basic version is priced at $35,000 in the United States. Mahindra's four-door sedan e2o plus costs approximately $8,000. (See also: These Are Tesla's Three Biggest Bets for Next Year.)
Read more: Analyzing Tesla's Entry Into India (TSLA, AAPL) | Investopedia http://www.investopedia.com/news/analyzing-teslas-entry-india-tsla-aapl/#ixzz4YIsfs7sn
India is set to overtake Germany as the world's fourth largest market for vehicles this year. While a number of auto makers have made a beeline to India in recent years, the market for electric cars is yet to take off in the country. According to research firm Ernst & Young, India has a "few thousand electric cars" in an automotive fleet that increased by 20.5 million in 2016 alone. There are multiple reasons for this, ranging from government bureaucracy to lack of incentives for manufacturers. As a result, Mahindra & Mahindra Ltd. (M&M.BO), part of India's Mahindra Group conglomerate, is the only manufacturer of electric cars. (See also: What Impact Will Growth in the Emerging Markets Have on Automotive Sector?)
The situation has improved in recent times. The Modi government has launched several initiatives to promote renewable energy-related products. For electric cars, the Indian government has initiated the Faster Adoption & Manufacturing of Electric Vehicles in India (FAME) program, which offers subsidies for manufacturers and incentives to customers for the purchase of electric vehicles. According to reports, the government's aim is to electrify the country's entire fleet by 2030. (See also: General Motors Halts $1B India Investment.)
However, Musk faces an uphill battle in capturing the Indian market. He will need to conduct extensive negotiations with the Indian government to begin manufacturing there. As demonstrated by Apple Inc.'s (AAPL) experience with negotiating to manufacture iPhones, a similarly premium-priced product, that could take a while. Even then, the absence of an extensive charging infrastructure and a ready market for its products could play spoilsport with Tesla's ambitions for the Indian market. (See also: Apple Close to Signing Deal With Indian Government.)
Meanwhile, importing vehicles straight from manufacturing plants in the United States might be an option. However, India's high import duties may further increase prices for the already expensive electric cars and further limit their audience. Based on previous reports, it seems that Tesla will enter the Indian car market with its Model 3 sedans, whose basic version is priced at $35,000 in the United States. Mahindra's four-door sedan e2o plus costs approximately $8,000. (See also: These Are Tesla's Three Biggest Bets for Next Year.)
Read more: Analyzing Tesla's Entry Into India (TSLA, AAPL) | Investopedia http://www.investopedia.com/news/analyzing-teslas-entry-india-tsla-aapl/#ixzz4YIsfs7sn
