Is a Tesla Gigafactory in India’s Future?

With the growing success of Tesla and its future plans looking promising, Tesla enthusiasts from India are continuing their request for updates on the electric car maker’s entry into the country. Although some India-based EV customers have been holding on to their Model 3 deposits for several years, CEO Elon musk has stated that it is quite difficult to enter India as an electric car company due to local protectionist policies. Leaving us to question whether Tesla would consider entering the country through Tesla Energy instead of electric cars?

In June of 2017, Tesla CEO Elon Musk, revealed that Tesla was “In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built.” Musk posted an update close to a year later about Tesla’s imminent entry to the country on Twitter. Musk went on to say that the company would love to enter the country, however there are some “challenging government regulations” that need to be addressed first.

Fast forward another year, after the 2019 SpaceX Hyperloop Pod Competition, when Musk was asked by the Avishkar Hyperloop team from IIT Madras when Tesla will be in India. Musk originally answered stating the company may enter the country in about a year but had not spoken of it until recently. Musk apologized to a Model 3 reservation holder on Twitter who has had his reservation for four years. 

Due to the density of the region, vehicles in India are dominated primarily by two and three-wheeled vehicles, making the idea of Tesla establishing a successful factory seem far fetched. Not only are the most popular vehicles in the region smaller in stature, they are also less expensive, causing the market to be much more competitive for a brand like Tesla who’s smallest vehicle is a midsize sedan. Should Tesla develop a smaller, more affordable EV it may have a better chance of attracting the conventional Indian car buyer.

Although India might not be the best market for large premium vehicles at the moment, it could be a perfect entry point for Tesla’s Energy department, as the country has been pushing towards sustainability. If the California based company is able to price it’s battery storage and solar solutions as aggressively as they do in the U.S. it stands a good chance of taking over a large portion of India’s commercial and residential market.

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