【Text/Observer Network Lv Dong】
"I must go next year."
In 2019 and 2020, Musk has been using this sentence to respond to the expectations of Indian netizens for Tesla's investment in India.
But 2021 has passed, and tesla has not been seen selling cars in India, nor has it seen the company set up a factory in India.
The main reason is that Tesla has not agreed with the Indian government on tariffs.
On the one hand, Tesla wants India to reduce tariffs, first sell cars imported from China locally, and then consider building factories; but the Indian government has proposed that if it wants to talk about tariffs, it should first build factories in the local area, and Chinese-made Tesla cars should not appear in the Indian market.
Seeing that Tesla has been reluctant to let go, on January 16, local time, senior officials from the Indian states of Punjab, Telangana, Maharashtra and West Bengal have thrown olive branches to Tesla, inviting the company to set up factories in the local area and promising to provide all necessary help.
However, the conditions for new energy vehicle manufacturers to set up factories in India should be marked with a question mark. At present, the Indian new energy vehicle market is still in the early stage of development, charging infrastructure is scarce, the power battery industry chain is not complete, and new energy vehicles account for less than 1% of India's total vehicle sales in 2020.
In the face of the invitation of several senior Indian officials, will Tesla come this time, or Will Musk continue to say "next year"?
Twitter screenshots
Just this past weekend, four senior Indian officials extended invitations to Musk:
Punjab Parliament President Sidhu said on Twitter:
I extend an invitation to Musk that the Punjab model will make Ludhiana a hub for the electric vehicle and battery industry, provide investors with one-stop licensing for an agreed period of time, and also help bring new technologies to Punjab, create green jobs, and take the road of environmental protection and sustainable development.
Maharashtra Water Resources Minister Patil said:
Maharashtra is one of the fastest-progressing states in India. We in Maharashtra will provide you with all the necessary assistance to help you gain a foothold in India. We invite you to set up a manufacturing plant in Maharashtra.
West Bengal Education Minister Rabbani shouted at Musk:
Come on, we in West Bengal have the best infrastructure, our leaders are visionary, and coming to Bangladesh means having business.
Minister Rao of Telangana wrote on Twitter:
Hello Elon, I am Minister of Industry and Commerce of the Indian state of Telangana. We are excited to partner with Tesla to meet the challenges of building a factory in India or Terengana." Our state is a leader in sustainability initiatives and a premier business destination in India.
Before these Indian officials made overtures to Tesla, foreign netizens asked Tesla CEO Musk on social media when Tesla electric cars would enter the Indian market. But Musk responded on Jan. 13 that the company is still working with the Indian government to tackle many challenges.
Tesla's negotiations with the Indian government have been going on for years, with disputes focused on tariff policy and whether to build factories locally. In July 2021, Tesla had asked the Indian government to cut import tariffs in order to allow Tesla vehicles to enter the Indian market, and Musk said bluntly at the time: India's import tariffs are the highest among the world's major countries. In response, India's Ministry of Heavy Industry asked the company to build a factory in India before receiving any tax incentives.
Some so-called sources said that India's ministry of heavy industry is mainly worried that other companies may seek similar concessions. An Indian official said that at present, the country does not offer any special offers to other automakers who set up factories in India. If Tesla is treated as a special case and makes concessions on import tariffs, it is unfair to existing companies that have already made huge investments.
Screenshot of the Reuters report
Currently, India imposes a 60% import tariff on electric vehicles priced at $40,000 or less, and a 100% tariff on electric vehicles priced more than $40,000. Foreign analysts pointed out that according to such standards, Tesla vehicles are too costly for buyers and may limit the company's sales.
Tesla's impact on the local automotive industry has also become a pressure on the Indian government. Indian companies such as Tata Motors have raised $1 billion to boost local electric vehicle production. The company said giving concessions to Tesla would run counter to India's plans to promote domestic electric vehicle manufacturing.
In October 2021, India's transport minister, Mr. Gadkarry, said he asked Tesla not to sell Chinese-made electric cars in India, calling on the company to build factories there to produce, sell and export cars.
But Tesla said it wants to sell imported cars locally first. Musk admitted on Twitter last July that if Tesla can succeed in importing cars, then there is a high probability of building a factory in India.
Musk tweeted screenshots
Although the Indian government has blocked Tesla cars with tariff measures, Indian netizens are very eager for Tesla's arrival. In 2019, Musk said in response to a question from Twitter netizens, "I would love to go to India this year." If not, it will definitely be next year! ”
In 2020, another post on Twitter suggesting Tesla invest in India was accompanied by a picture of a T-shirt with a line that read: "India wants Tesla." Musk replied to the post at the time, "Next year is for sure, thank you for waiting."
Source: Twitter
At present, Tesla's global vehicle manufacturing plants are only the Fremont plant in the United States and the Shanghai plant in China, which not only serves their respective local markets, but also takes into account the needs of other markets in Europe and Asia.
In order to meet the growing demand in the European market, Tesla announced at the end of 2019 to build a gigafactory in Berlin, Germany, with an annual production capacity of 500,000 vehicles. However, more than two years later, the Berlin plant has not yet been officially put into operation, and the plan to start production in November last year has been postponed due to the delay in issuing the final license by the local government, and the corresponding production and subsequent capacity ramp-up time will be repeatedly postponed.
In view of the future global production capacity layout, Musk has revealed that Tesla will first complete the construction of the Berlin factory, followed by the construction of a second factory in the United States, and then consider building a second factory in Asia.
Tesla Shanghai Gigafactory Image source: official website
Tesla's second factory in Asia is seen as an opportunity in India. However, the Indian electric vehicle market is still in the early stages of development, and of the 2.4 million cars sold in India in 2020, only 5,000 are new energy vehicles, and the local charging infrastructure is scarce, and the power battery industry chain is not perfect.
Therefore, there are also views that compared with India and other Asian markets, Tesla's second factory in Asia has a greater probability of landing in China.
On the one hand, since the Shanghai plant was put into operation, the localization rate has approached 100%. Around the Shanghai factory, Tesla has formed a relatively perfect supply chain layout in the Yangtze River Delta region, if Tesla's second factory in China replicates the Shanghai factory building method, relying on the existing supply chain, the efficiency of factory construction may be greatly improved; on the other hand, the demand for Tesla in the Chinese market is still increasing, In November 2021, Tesla's sales in China were 52,859 units, an increase of 111% year-on-year, and the sales volume exceeded 50,000 for the third consecutive month; in addition, If Tesla positions itself in China as a brand to compete with Volkswagen in the future, it will be sooner or later to build a second factory in China.
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