A year after planning to enter the Indian market, Tesla still has no new cars for sale in the local area, which may mean that the new energy manufacturer still has resistance to enterIng India.
According to Teslaati on February 16, India is currently willing to consider Tesla's import tax cuts, but only if Tesla is willing to buy $500 million (about 3.16 billion yuan) worth of auto parts from India.
Tesla said as early as August 2021 that it had procured $100 million worth of parts from the country. A number of Indian auto parts suppliers are negotiating with Tesla about the sale of parts, including windshields, brake differentials, gears, power seats, interior components and so on.
At the time, Tesla also said it would purchase more parts from India after receiving tax incentives and would invest in projects such as electric vehicle charging infrastructure in the Indian market.
Earlier in 2020, several Tesla Model 3s were photographed having been "secretly tested" in the Indian market, with a right-handy steering wheel design that conforms to local driving habits and a central control screen display that was reversed left and right. Subsequently, there were pictures showing Tesla's V2 supercharger station appearing in India.
Soon after, Tesla's 7 models in India were approved for sale, all Model 3 and Model Y models.
Although Tesla has been testing products in India since last year, the world's leading new energy vehicle company has encountered great challenges there. Tesla CEO Elon Musk has pointed out that India's import tax is the highest in the world, and the tax rate on high-end imported electric vehicles may be as high as 100%.
India's road transport minister has repeatedly expressed support for Tesla, arguing that tesla should enjoy lower import tariffs and saying India will provide incentives to ensure that Tesla's production costs in India are lower than in China. But Musk did not have plans to build a factory in India, but hoped to test the local market by importing or assembling.
It is worth mentioning that even if Tesla enters the Indian market with low taxes, it may not be able to replicate its success in China.
The reason why Tesla can sell well in China, in addition to the support of new energy policies, Tesla's price in the domestic market has been reduced to almost the lowest in the world, thanks to the continuous optimization of the supply chain, the increase in the proportion of localized parts, and the reduction in marginal costs and the decline in the price of new cars brought about by the increase in sales.
In contrast, the Indian market has a low per capita consumption of cars, with an average car purchase budget of no more than $10,000 (about 63,000 yuan), and the infrastructure and supply chain related to electric vehicles are weak, which may cause Tesla to fail to get the expected profits.