The basic model electric vehicle (EV) of TESLA is expected to cost more than the currently most expensive electric vehicle in India, the XEV 9e from Mahindra and Mahindra.
The reason for such an expensive on-road price is due to high import tariffs on automobiles, a policy that President Trump of USA is stiffly resisting.
At present, global automakers such as Harley Davidson, Ducati, Jaquar Land Rover, Toyota, Volvo, BMW, among others import Completely Built Units (CBUs) of select models which attract 70% duty for models priced under INR 32 lakhs (USD 40,000).
For models priced over INR 32 lakhs, the import duty is pegged at 100%, further adding additional cess and surcharges.
Currently, EVs share for Indian automakers is 2.3% of their total sales and is expected to reach 10% by 2030.
Under the new policy that is being tabled for Electric Vehicles in India, imported brands can enjoy a 15% duty, if the manufacturer commits to invest INR 4,150 Cr (USD 500 mn) in India for creating a local facility.
Such international automakers will be required to invest the proposed sum with 3 years of opening the Indian facility, as well as achieve 25% domestic value addition initially, increasing it to 50% within 5 years.
The automakers are also required to achieve an annual turnover of INR 2,500 Cr by the second year and progressively increasing it to INR 5,000 Cr by year 4 and INR 7,500 Cr by year 5.
The proposed policy might also include the setting up of EV infrastructure, such as Charging Parks, a point that is being debated at the highest echelons of the Government for its merits, as global giants such as TESLA have already created such facilities internationally.
Global EV giant TESLA is expected to open its first retail store in India at the Bandra Kurla Complex in Mumbai, where a top International Property Consultant (IPC) is scouting locations for the brand.
Jio World Plaza, owned by Billionaire Mukesh Ambani is one of the possible locations where the store could come up.
Similarly, the company is scouting for locations in the New Delhi region and Ambience Mall, along with other standalone locations on the Delhi-Meerut National Highway leading towards Gurugram is being considered, according to local sources.
Editor’s Note
TESLA’s India entry would hardly impact sale of EVs manufactured by Indian automakers as the price difference is expected to be significant.
For Ex., the XEV 9E, the electric version of M&M’s most popular and comparable ICE model XUV 700 is priced on-road at INR 32.50 lakhs while the petrol / diesel versions are INR 3-4 lakhs cheaper.
The price arbitrage for petrol vs EVs can be equalled over a period of 2.5-3 years, by when the EV model could become partially obsolete, with newer models boasting features not present in older models.
EVs in India would probably do well in two extremes of the segment, for vehicles priced under INR 10 lakhs and over INR 50 lakhs.
Both segments will have significant customer patronage – the top ends will command social status while the ones at the lower end will command pricing value over similarly priced petrol vehicles.
Discover more from Retail Updates
Subscribe to get the latest posts sent to your email.
