Tesla seems all set to enter the Indian market sometime in the second half of this year. This information comes from a Twitter update, wherein a user named Ishan Goel asked Elon Musk of Tesla about the company's entry timeline in India. Musk replied saying “Hoping for this summer”, which implies the launch could take place anytime between June and August, 2017. Interestingly, the Model 3, Tesla's most affordable electric car has been open for booking since last year on the company's official website for a price of $ 35,000.
What Elon Musk didn't make clear though was the scope of the company's entry into the Indian market. Deliveries of the Model 3 are a given, considering the pre-orders and the service network required to service these cars. While $ 35,000 equates to Rs 23.5 lakh roughly, the Model 3 will cost a lot more due to the duties it'll attract being brought in through the completely built unit (CBU) route. However, the Indian Government has been trying to push electric and hybrid cars and is also offering incentives on their purchase. Owing to this, the Model 3 will be subjected to some concessions, resulting in a lower price than imported cars of similar value. Musk had earlier expressed interest in setting up a supercharger network too for supporting its customers. Supercharger network allows Tesla users to recharge their car batteries for up to 270 km range in 30 minutes and a full charge in 75 minutes.
While Tesla cars are popular for their autonomous driving technology, it's unlikely that this technology will be offered in India. Since Tesla's Autopilot technology makes use of ultrasonic sensors and cameras, it requires proper lane-marking, road sign identification and a civilised traffic in general. In India, where everything ranging from a dog to a human can be found sprinting across the road and where lane discipline is non-existent, any autopilot system would find it challenging just to survive for a few minutes, let alone drive from point A to point B. In addition, even on higher Tesla models, the self-driving technology is offered optionally for $ 8,000, which might push the car's cost to well over Rs 60 lakh, ex-showroom.
It is also a known fact that Elon Musk had earlier shown interest in setting up a lithium-ion manufacturing plant, also known as the Gigafactory. While the intent falls in line with the Government's push for electric mobility, any concrete development is yet to be announced. Apart from selling cars in limited numbers, Tesla could have a larger business interest in India for manufacturing, wherein it can capitalise on the country's low-cost operations and export to international markets. This would allow the company to reduce its battery costs by up to one-third from present levels, resulting in a significant price-reduction of Tesla electric vehicles since battery accounts for the single-largest cost in an electric car. In addition, Tesla utilising its first-mover advantage could then further sell batteries to other carmakers, opening up a secondary revenue stream.
Tesla has not yet confirmed any details related to its automotive and non-automotive business plans for India. However, given Musk's ambitious growth plans for Tesla, it makes sense for the company to enter early.