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Tesla In India Opens Market For Electric Vehicles

by Vrinda Jain
Tesla In India Opens Market For Electric Vehicles

January 18, 2021

India's electric vehicle industry will still take a few more years to develop fully, considering the lack of clear pointers towards electrification. But the movement has started.

Recently, the US-based automotive company Tesla confirmed its plans to start operations in India. With ground-breaking technologies emerging, the automobile industry has transformed with explosive ideas on rapid mobility and sustainable progress in recent years.

Energy protection issues, climate change, rapid urbanisation, sustainability and shifts in behavioural habits have provided additional momentum for moving from conventional combustion-engine vehicles to electric vehicles.

Tesla-electric-vehicles-in-india-scoolbuzz
Karnataka Chief Minister BS Yediyurappa tweeted to inform that Tesla is setting up its R&D centre in Bengaluru to commence its India operations soon.

Tesla to Start Operations in India

As promised.

- Elon Musk, CEO & Founder, Tesla INc. Tweet

Elon Musk, the billionaire CEO of Tesla, announced his plans to set up Tesla centres worldwide. In a remarkably brief tweet, the world’s richest man responded to a tweet link to a blog post on the Tesla fan site Tesmanian that stated, “Tesla cars would be costly for Indians”.

However, when the company begins production within the country, Tesla cars will become more affordable for the Indian middle class. This is the first comment that Musk has made since the company registered its office in Bengaluru in lines with the plans for expansion in India. Tesla registered with the authorities in Bengaluru as ‘Tesla India Motors and Energy’ on 8 January 2021.

Global Expansion of Tesla's Operations

According to a Tesmanian blog post, Tesla is in talks with India to open its shops, offices, research and development centres, and manufacturing facilities. The blog post also describes that in India, a country marred with substantial economic inequality, Tesla will concentrate on the “wealthy segment”.

Tesla’s entry into the Indian market can further bolster a move towards more sustainable vehicle operations. But, given the Indian automobile industry’s history, the EV market’s future remains widely obscure in a country that is quite literally driven by budget-cars. 

Emerging Scenario of EV's in India

As the global economic disruption impacted different sectors across the world, the Indian automotive industry hasn’t been an exception. In such a situation, a serious move towards electrification can be critical and significantly affect auto original equipment manufacturers (OEM) and auto components manufacturers in India.

And work towards this transmutation has begun with Tesla’s move, setting the stage for India’s ambitions about the emerging electric vehicles industry. India has firm hopes that a high degree of convergence in e-mobility would be reached by 2030.

Not surprisingly, the alarming emission indices that continue to increase and the enormous dollars that the country has to pay for annual imports of crude oil are the key reasons. New Delhi saw a red alert in December 2017 and came close to Beijing regarding pollution toxicity.

If India manages to achieve this aim effectively by 2030, around 1 Gigaton of carbon emission could be cut down.

Technological Leaps Are Imperative

To cultivate this technology, the country rapidly needs to build an integrated strategy. The eco-system solution is what will allow India’s developments in electric mobility to be achieved. The FAME I policy in 2015 and FAME-II in 2019 on ‘Faster Adoption and Production of Hybrid and Electric Vehicles’ has in several respects been instrumental in successfully establishing an initial but nascent market.

Electric vehicles were only entrusted to global automakers, but the Indian automakers have managed to tap into the niche market. Although countries including Europe, China, and the US at the forefront of the adoption of electric vehicles, India, among many other industry-specific challenges, is at a developmental stage in the production and adoption of electric cars due to a lack of policy clarity.

Ev-current scenario-in-india-scoolbuzz
Electric vehicles was only entrusted to global automakers but the Indian automakers have managed to tap into the niche market.

Although there is no shortage of government incentives in India, both industry and consumers feel insufficient infrastructure and unaffordable EVs prices.

Challenges for EV’s in India

Of the many challenges that any new segment of a business in an unconventional setting, and a market as uniquely diverse as India’s, the primary challenges that the EV makers can face in India might include:

Battery Costing
High Prices
Charging of the Battery

Battery Costing

The battery cost and power electronics account for almost two-thirds of an EV’s cost. Nickel-metal hydride (NiMH) and Lithium-Ion (LiON) are the most commonly used battery materials today. Multiple factors contribute to the high cost of processing EVs, such as dead-supply gaps, unprofitable low qualities, etc. And this is a primary challenge to the vehicle’s success in the country.

High Prices

The current high price of EVs is the greatest obstacle for buyers seeking to go electric. The almost 3x price tag of an EV is too much of an entry obstacle for a customer who is reluctant to select a hybrid instead of the identical internal combustion engine (ICE) vehicle. Unfortunately, among purchasers in the lower price group, price sensitivity is also higher. And the issue of cost-of-ownership would further impact EVs’ long-term viability.

Tesla-Electric-Vehicle-batteries-India-scoolbuzz
Tesla Electric Vehicle Batteries India

Charging of the Battery

Currently, India needs to have sufficient charging infrastructure to improve Indian customers’ adoption of EVs. The lack of charging infrastructure will make consumers anxious about the range, as the vehicle cannot run long without charging. The battery can be charged either through home charging or public charging.

In-home charging, the client needs to have a single-phase 230V/15A supply. They can produce up to 2.5 KW at most. The charging phase takes time, and the customers are supposed to be charging the EVs at night. For public charging, it will be maintained by the government or any of its other bodies. Parking lots, malls, offices may be a target to offer public charging.

Overcoming range anxiety will be key to the success of the EV market in India. A big push will arise from infrastructure expansion. This will help the automobile enterprise to produce EVs for mass consumption.

- Narayan Subramaniam, CEO & Co-Founder, Ultraviolette Automotive Tweet

Nonetheless, India’ holds massive opportunities for the electronic vehicle segment due to the large middle class and substantial economic capabilities. Studies have forecasted that the country’s electric vehicle market could be worth nearly $206 billion (Rs 14,42,000 crore) in the coming decade if India were to achieve its 2030 electric vehicle (EV) ambitions.

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