Tesla now needs to ‘Make in India’ to sell cars here as Government says no to imported electric cars

Tesla and other electric manufacturers will not be allowed to import their cars, and driver-less cars have been taken off the table completely,

By:July 25, 2017 2:30 PM

In a country with 22 lakh people who depend on their driving skills for a living, driverless cars may not be the right step ahead. This is something that the Indian Government seems to believe in very strongly. Union Minister Nitin Gadkari has recently been vocal about dispelling the idea that autonomous vehicles will come to India. He believes this move is against the Government’s initiatives to create 50 lakh jobs by training drivers across the country. Now, this may sound like a tremendous setback, but it is not as bad as it’s made out to be. Automation taking jobs has never borne well for any economy in the short-term. Automation is largely achieved through an integration of software, which can be played around with to create a difference to the end result or application of a machine. Convenience features like auto-parking and level two autonomy are not in the crosshair though and will continue to feature in cars sold in India.

That’s not it though, although the government has plans of going all electric by 2030, they insist that they will not allow or encourage companies to import vehicles, but urge electric vehicle companies to manufacture in India. This may seem like an awfully contradictory move, but, the reality is far from that. More the number of companies that start manufacturing in India, higher the chances of an EV that could appeal to the mass-market. The 2030 all-electric goal can only be met if the masses start adopting EVs as their main vehicle and not a secondary runabout car.

That brings us to Tesla, which has been keen to be present in India, both through manufacturing and sales operations. If imported, the Tesla Model 3 could cost more than Rs 50 lakh but incentives could soften the blow on a consumer’s pocket. However, if Tesla does set up a plant in India, it will assemble the Model 3 here in all probability, considering the limited supplier base capability in India for EVs. In this scenario, we could expect the Model 3 prices to come down considerably to about Rs 35 lakh. Over a period of time though, suppliers of battery and electric motors will spawn thousands of new jobs and the influx of new technology and R&D into India will further benefit the industry. And for all the criticism that the government faced for their norms on Apple, they did ultimately manage to negotiate a compromise, which led to Apple dropping prices on the locally produced handsets, giving us hope for the auto sector as well.

The Government will also create their own market aggregation software for cabs on the lines of Ola and Uber, but it will not just cater to cars, but electric three and four-wheelers as well depending on the distance of travel. Gadkari is clear that any advances by market aggregators, possibly referring to Ubers Self-driving platform  to launch self-driven transportation in India will be turned away.

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