Tesla business in India: American Electric Vehicles (EV) Giant Tesla is working fast on the Contract Manufacturing model as part of its strategy to enter India. Under this, the company is interacting with the local production of its cars by partnering with Indian automobile manufacturers. This step will not only help Tesla to expand rapidly in India but will also strengthen the government’s ‘Make in India’ initiative. In this direction, Tesla has been trying to make its place in the Indian market for a long time, but was delayed due to import duty and various policies related to local production. Now, Tesla’s strategy is to ensure that it can produce vehicles at the local level to reduce the cost and give priority to domestic production as per the Government of India policy.
According to industrial sources, Tesla is interacting with several Indian vehicle manufacturers who already have additional production capacity. This strategy will help the company avoid the long and complex process of setting up new factories and will be able to enter the market directly.
Contract Manufacturing: Tesla’s new strategy*
Contract manufacturing is a process in which a company outsources its production activities to another established manufacturer. There are many reasons behind this strategy of Tesla:
1. Cost reduction:
In India, heavy import duty on cars apply, which increases the price of electric vehicles significantly. Local production can avoid these fees and Tesla’s cars can be more economical for Indian consumers.
2. Follow local policy:
The Government of India wants EV companies to make their vehicles and export in India. Contract manufacturing can be an effective way to work under this policy.
3. Rapid entry into the market:
If Tesla had to set up his own production plant, it could have taken it many years. Tesla can start production quickly by using the existing infrastructure of Indian companies.
4. Market Test:
The market of electric vehicles in India is still developing. Through contract manufacturing, Tesla can first see the response of Indian consumers and can plan his investment based on it.
Which Indian companies are talking about?
However, it is not clear which companies Tesla is interacting with, but India have many vehicle manufacturers who can become a possible partner for Tesla:
1. Tata Motors:
The largest EV manufacturer in India is. The company has strong manufacturing capabilities and supply chains.
2. Mahindra & Mahindra:
Electric is interested in the production of vehicles and also has experience. Can become a reliable partner for Tesla.
3. Maruti Suzuki:
Is the largest vehicle manufacturer in the Indian market. Its production facilities and dealers can prove beneficial for network Tesla.
4. BYD India:
China’s EV company Byd is already making a car in India. Tesla can increase its production capacity by combining with byd.
Tesla’s challenges in India
Although Tesla’s entry into India has many benefits, it may also face some challenges:
1. Lack of electricity and charging infrastructure:
The network of charging stations in India is still developing. It will take time to establish Tesla’s supercharger network.
2. Price and Affordability:
Indian consumers usually prioritize affordable cars. Tesla will have to decide the price of his cars according to the Indian market.
3. Putual instability:
Automobile sector policies in India often vary. Tesla must ensure that it fits into India’s long -term EV policy.
Possible impact of Tesla’s entry into India
If Tesla successfully enters India, it will have a big impact on the country’s EV industry:
1. Competition will increase in EV market:
Other companies will also be forced to strengthen their EV portfolio with Tesla’s arrival. This will give customers more options and may also reduce prices.
2. Promotion of local manufacturing:
Tesla’s contract manufacturing will provide new technology to the automobile industry in India. This will also increase employment opportunities at the local level.
3. Increase in innovation and research:
Tesla can also establish its research and development centers in India. This will increase India’s engineering and technology capacity.
4. India’s role as export center:
If Tesla starts production in India, it can also export to other markets in South Asia, Africa and Europe. With this, India can become an important player in the global EV supply chain.
Tesla’s entry into India through a contract manufacturing model can be an important strategic step. This will not only help Tesla to cut the cost and function to work to the local policy, but can also help the Indian EV industry to take new heights. However, charging infrastructure, government policies and consumer behavior for electric vehicles in India have to be taken into account. If Tesla successfully crosses these challenges, it can become a big name in the EV market of India in the coming years.
