Tesla’s turn

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Published: October 29, 2015 12:37:49 AM

All is not lost for India as far as the American electric car and battery maker’s Asian foray is concerned.

When the Chinese media reported that electric car company Tesla will soon be setting up a manufacturing facility there, much disappointment was voiced in India. Many here concluded that despite prime minister Narendra Modi’s high-profile meeting with Tesla founder-CEO Elon Musk in the US—where Modi pitched the Make-in-India initiative to leading techpreneurs—the car-maker just “drove past” India. Musk later clarified that China plans are on hold for at least 3 years. Now that he has tweeted that setting up a Gigafactory—where Tesla makes giant lithium ion storage batteries, its other famous product—in India “makes sense in the long run”, hopes are up once again.

India holds many competitive advantages for Tesla. Much of its rural population doesn’t have access to electricity, and there are daunting challenges for grid connectivity in parts of the country. Thus, a potentially huge market awaits storage batteries. Indian metros will soon need to confront their pollution problems, and that is where both of Tesla’s products offer a remedy. India doesn’t have an indigenous electric car (except perhaps Mahindra & Mahindra’s Reva)that could compete with Tesla—in China, BYD Auto leads the electric and hybrid cars market and numerous Tesla clones, as Wired reports, are set to hit the Chinese market soon. The car-maker also must contend with rising labour costs—something that has already spurred a Foxconn to halt expansion in China and open shop in India.

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