[TusharK]

Tesla receives approval for 3 more EV variants in India

According to media reports, Tesla now has seven EV variants approved in India.



The government of India had approved four variants back in August this year. Tesla India has now received approval for three more variants from the Ministry of Road Transport and Highways.

We still don't know the exact details of the variants that have been approved. However, the company has been testing the Model 3 and Model Y in India for quite some time.

Initially, Tesla plans to import its EVs into India and has requested the government to reduce the import duty. If there's enough demand, the carmaker could evaluate the possibility of local manufacturing.

Source: Teslarati

Link to Team-BHP News

[Strider24]

Saw this Tesla on road test yesterday in Pune .
It was nice to see it in person. Hopefully it becomes affordable enough for me to own it soon.

[Venkatesh]

Elon Musk about Tesla India launch, is this about Import duties and factory setup?



Link

[volkman10]

Musk shares update on Tesla launch in India, says facing challenges.

'import duties are the highest in the world by far of any large country!' He had also said that a Tesla 'factory in India is quite likely' but at the condition that its imported cars first succeed in the country.

Link

[kosjam]

Originally Posted by volkman10

Musk shares update on Tesla launch in India, says facing challenges.




Link

While I personally admire Elon Musk and Tesla (and SpaceX and The Boring Company...) it is clear that he is trying to manipulate social media to show that the Indian Government, just like the US government, is anti EVs or at least anti Tesla.

If Tesla imports its cars, there is no incentive left for them to make in India. They will happily keep selling their cars under the limit as would be prescribed by the government, without actually investing in production.

Import duties are paid by all automakers, so why should Tesla be given a special treatment? After all, EVs are now scheduled to be offered by almost all major manufacturers so Tesla's demand no longer holds value. Had they been requesting this 4 years ago, it would have made sense, but not in the current Indian automotive scenario.

[fuzzydealhunter]

For some one trying portray an image that he is one with the masses, Elon Musk sure wants special treatment all the time. I hope Indian Govt. does not back down. If he wants to sell in India he can either pay the taxes everyone has to deal with or produce in India.

[udaikalra01]

My question is, even if import duties were to be lowered to promote EVs in the country, why should we do it for Tesla which isn't even a mass market player according to our country conditions? Cheapest Tesla starts at Rs 32L, even if duties are lowered there's no way they would be able to price it below Rs 45L. How would such a premium car promote EVs in the masses? We should better focus on locally made cheap EVs.

[kosjam]

Originally Posted by udaikalra01

My question is, even if import duties were to be lowered to promote EVs in the country, why should we do it for Tesla which isn't even a mass market player according to our country conditions? Cheapest Tesla starts at Rs 32L, even if duties are lowered there's no way they would be able to price it below Rs 45L. How would such a premium car promote EVs in the masses? We should better focus on locally made cheap EVs.

im guessing both Elon bhai as well as the Indian government knows this, and thats why Elon is placating Indians by making the right noises and so is the Indian government by making a show of inviting Tesla for opening a factory and taking test drives etc etc.

[GutsyGibbon]

Originally Posted by udaikalra01

We should better focus on locally made cheap EVs.

The govt. needs to mobilize support for country wide charging network. Dozen chargers every 10 kms on national highways. This will ensure cheaper EVs with much smaller batteries start to look enticing. Also, push to standardize charging connectors for 2 wheelers and cars.

[Turbanator]

They must have done their homework. The cheapest Model 3 in the US starts at 40,000 USD. That makes an ex-factory price of Rs 30 lac without customs, GST and RTO. They can’t build everything here and on kits, the duty will be about 25%. Then add 40-50% GST on vehicles. That makes the Ex-showroom price over Rs 50 lac.

Now, how many people will be buying this car at 50 lac is something no one can predict and putting up a factory with no sales plan is not something Tesla will do. If they launch with 100% customs duties, this car will be even more expensive. Comparing with launches from BMW and Mercedes, have got only a few units and most likely taken a hit (recovered via the publicity they got everywhere) but Tesla cannot simply bring a few pieces and start operating. That’s not the way they work. Tesla has shown what they are capable. Regarding the home competition, it may sound bad but we still don’t have a fully developed IC car that costs over 30 Lac and people buy in thousands. We do need the companies like Tesla.

[Moto_Bear]

Originally Posted by Venkatesh

Elon Musk about Tesla India launch, is this about Import duties and factory setup?

Originally Posted by kosjam

If Tesla imports its cars, there is no incentive left for them to make in India. They will happily keep selling their cars under the limit as would be prescribed by the government, without actually investing in production.

Leaving the basic explanation of principles of Macro Economics aside, while reduction on the taxation front may benefit the individual buyer, it has huge and when I say, huge, I mean a H-U-G-E impact, both on the national economy and the way the current government is trying to portray India as the world's production hub with 'Make in India' and 'Atmanirbhar Bharat'. While keeping this post both apolitical and in layman terms for understanding, with the current scenario of International trade and the contemporary economic development index of India, it is of no question that India has to shift from a net importer of goods and commodities to a net exporter. And cutting down on taxes to facilitate foreign brands such as Tesla who don't want to invest in India but see it just as a potential market for their product is the definition of colonial economics.

On another note, let's do a comparative analysis on Tesla's plans for India as well as India's biggest rival, both economically and militarily, China.

1. Whereas, Tesla is adamant on reduction of tariff duties on imported vehicles, it fails to show any interest towards making any concrete investment in India. It wants to reap the benefits without actually sowing the crops.
2. Whereas, in China, Tesla boasts of operating the Shanghai Giga Factory, the same Tesla is simply unwilling to make any strong commitments to manufacturing or even assembling the cars in India. Simply cutting tariffs would not only be harmful to the economy at large due to wealth drain(no manufacturing means no actual value added to the GDP) it will be a big hit to the domestic manufacturing who are venturing into the EV market as Tesla can then focus on ramping up its production in China to meet its supply needs in India.
   
   Tesla ramps up electric car production in China
   Tesla is rumored to be working on a new factory in China
   Tesla Delivered a Record Number EVs From Its China Plant Last Month
   

In short, Why is that Tesla or any other company for matter enjoy tax benefits simply by importing the vehicles when they can simply manufacture or assemble here and enjoy the tax benefits through PLI schemes?

The simple answer to this question is in how most of the companies owned by Elon Musk work. Tesla, much like the Boring Co. and what it did in Las Vegas, aims at testing the Indian waters and how the market responds to it, without actually putting their neck on the line or any other potential risk associated with it. Tesla wants its vehicles to penetrate the Indian market without actually taking any risk or make any commitment to the Indian market.

The Economic and Social Impact of Colonial Rule in India

Editing to avoid repetitive posts:

Originally Posted by GutsyGibbon

The govt. needs to mobilize support for country wide charging network. Dozen chargers every 10 kms on national highways. This will ensure cheaper EVs with much smaller batteries start to look enticing. Also, push to standardize charging connectors for 2 wheelers and cars.

There's a brilliant video on Youtube why just through an increase in the number of chargers won't solve much and given that the Tesla chargers cost a fortune to install, I don't see the situation improve unless some domestic player such as Tata jumps in. Sharing the video below:

https://youtu.be/pLcqJ2DclEg

Originally Posted by Turbanator

Regarding the home competition, it may sound bad but we still don’t have a fully developed IC car that costs over 30 Lac and people buy in thousands. We do need the companies like Tesla.

No, it doesn't sound bad when you take into account the historical perspectives of how things have been domestically and internationally. India is still going through its industrial phase and it has a long way to go till it becomes a post-industrial society. The development that you see happening rapidly is a sign of industrialization whereas Internationally, most of these companies places of origin are post-industrial societies where industrial processes have occurred and are now pretty much stagnant. As far as a good IC car that costs over 30 Lakh is concerned, we do have Mahindra with XUV7OO and with XUV9OO, we'll definitely see it breaking the 30 Lakh threshold as well. See the thing is simply that Indian industrial sector is in its adolescent stage and is maturing but it takes time, and in that time, we can't let the domestic processes and markets be exploited to the skin of the teeth by International giants. If indeed allowed to do so, in hindsight, it will be very similar to the exploitation of Indian Textile industry by the Britishers.
And, we don't "need" companies like Tesla, although they are free to enter the market as per the rule of the law, without any special treatment.

[Turbanator]

Originally Posted by Moto_Bear

while reduction on the taxation front may benefit the individual buyer, it has huge and when I say, huge, I mean a H-U-G-E impact, both on the national economy

Will like to know which of the developed countries have grown by creating such Taxation barriers? USA, Japan, Germany or UK?

Yes, there are numerous examples where underdeveloped countries have failed or even worsened by not having their own manufacturing and how we have done better than anyone else but in certain fields, it will not hurt anybody if the overall ecosystem gets a boost by allowing some time based relaxation, especially for a newer Technology.

it is of no question that India has to shift from a net importer of goods and commodities to a net exporter. And cutting down on taxes to facilitate foreign brands such as Tesla who don't want to invest in India but see it just as a potential market for their product is the definition of colonial economics.

What do you think Ford did wrong? They did everything, setup a world class plant, better than anybody else and still have to close. GM also suffered. Don’t people notice these things and how such failures weigh on their mind? Agree, there is no guaranteed success but something must be wrong somewhere.

At the same time, there are numerous other manufacturers who have succeeded as well, like Kia, so it’s not that everything is bad here. It’s a risk that not everyone is willing to take.

By having a company like Tesla, the whole EV things get a push, if you don’t thing that way, fair enough. In any case, Tesla is not something that majority of car buyers can afford at first place, not just in India but everywhere. And, then there are challenges on the EV front.

But as our economy grows and as more people can afford, buying an EV will help save us Oil and environment. My reasoning to support this segment with lower duties is purely from that prospective.

let's do a comparative analysis on Tesla's plans for India as well as India's biggest rival, both economically and militarily, China.

Average cost of Car sold in China will be much higher than our market and so will be the paying/ earning capacity of an average Chinese. Everything is related to how much we earn.

Whereas, Tesla is adamant on reduction of tariff duties on imported vehicles, it fails to show any interest towards making any concrete investment in India. It wants to reap the benefits without actually sowing the crops.

No, they are just trying to limit the risks. It’s not as if Tesla is going to displace Maruti or any other Indian manufacturer. Their cheapest car at Zero Duties, just with current GST will be over Rs 40Lac. At these prices, the best they can hope is about 1000 units a month and given the initial costs, I doubt they can make money even with Zero Duties. But, going forward, they can do something different for us, with less electronics/ automation, probably have a different model for countries like ours and eventually build something locally.

What they & others are asking is relaxation for some time/ number of units to test our market before larger investments are made. Fair demand in my opinion but I am not good in economics, so the people who take such decisions will know far better.

[Moto_Bear]

Hey Turbanator.

Hoping to keep this answer short, and also providing necessary sources from where I draw my conclusions.

Originally Posted by Turbanator

Will like to know which of the developed countries have grown by creating such Taxation barriers? USA, Japan, Germany or UK?

Well, the answer to this question is all of them. Japan was not this meek and more or so a subordinate to USA before USA's intervention into rebuilding the Japanese economy after destroying it to shreds. Japan was a beast of a nation pre-1945 and had the courage to challenge the mighty USA without breaking a sweat. Japan always had a closed economy and according to some reports, would warn the foreign trade ships to either return or be killed by the Navy(heard from my Grandpa and his colleagues who have served in the Armed forces). That's how much of closed economy Japan was. Another example would be UK, which during its entire industrialization period was knee-deep in colonial economics and being a export based economy towards its colonies, restricting its internal markets to foreign products.
Heck, the all mighty USA still follows selective import tariffs to this day even on which type of Mangoes will be sold in their market, and given how Indian mangoes which will be exported to USA due to the recent 2+2 trade agreement is such a big news.

Research Paper on Japanese Economy Pre and Post 1945 War

Originally Posted by Turbanator

What do you think Ford did wrong? They did everything, setup a world class plant, better than anybody else and still have to close. GM also suffered.

I believe a lot of us would agree on what Ford did wrong and that encompasses not being pro-active and sensitive to Indian customer's wallet, needs and demands; letting an amazing product such as EcoSport die down due to no upgrades and the biggest of all, which Mahindra is now focusing on, being true to what you know best to do, and that is Trucks and SUVs. Ford and GM even, for that matter aimed at smaller cars targeting MS. Where Hyundai was successful, both Ford and GM failed and they failed big. For a detailed read, here are some articles:

Analysis: Why Ford failed in India by Hormazd Sorabjee
Ford's India exit: What went wrong and who would benefit from it

Originally Posted by Turbanator

At the same time, there are numerous other manufacturers who have succeeded as well, like Kia, so it’s not that everything is bad here. It’s a risk that not everyone is willing to take.

Kia did exactly the opposite, by giving Indian customer what he/she wanted; Features. They offered ton of features and branded the car as premium by not shying away from pricing it dearly. Where others thought India was a price sensitive market, they found out the nerve of the Indian market which was Value For Money. This VFM is the sole reason behind Mahindra's XUV being such a hit, back in 2011 and in 2021 as well.

Originally Posted by Turbanator

By having a company like Tesla, the whole EV things get a push, if you don’t thing that way, fair enough. In any case, Tesla is not something that majority of car buyers can afford at first place, not just in India but everywhere. And, then there are challenges on the EV front.

While I disagree about Tesla being the catalyst in India for an EV push when 80% of the population won't be able to afford one simply because of the sticker price, on the other hand, simply trusting Tesla to bring forward an EV push, would simply undermine the effort being put in by Tata, MG and Hyundai in their respective price bands. Simply put it this way, Why would Hyundai or MG or any other X brand would then produce in India when companies such as Tesla would simply be importing their goods without any taxation or limitation on it. Why would Hyundai lineup their EV portfolio such as Kona and Ioniq for the Indian market if they can simply import them. India's economy would crash like nothing and the per capita income that we are trying to build, so that everyone can buy better cars and amenities and live that much more comfortably, would see an end if one of such crucial industry is allowed to import at reduced tariffs. Even USA doesn't allow this kind of Free Trade.

Fun fact: Tesla would go bankrupt if they were to sell only the base versions of Model 3 starting from $35,000 sans the autopilot. One can simply understand why they want reduced tariffs for their vehicles. There's a beautiful research article on this and I quote:

The Model 3 we disassembled was $49,000 which included the 75 kWh battery
(+$9,000) and the high end trim (+$5,000). We estimate this model has a factory
variable margin of ~29%, a gross margin of ~18%, and an operating margin of
~7%. However, the incremental margins on the options are high. We assume the
base version at $35,000 would lose about $5,900 per car.

Originally Posted by Turbanator

No, they are just trying to limit the risks. It’s not as if Tesla is going to displace Maruti or any other Indian manufacturer. But, going forward, they can do something different for us, with less electronics/ automation, probably have a different model for countries like ours and eventually build something locally.

See this is where I get particularly confused about Tesla's long term goals in India and its over enthusiasm in the Chinese production. One quick Google search and you will find that Tesla produces over 50% of its global vehicle sales in China.

Half of Tesla's global deliveries in 2021 came from China

Why is it then, Tesla is unsure and unwilling to invest in India which has low labor cost, highly skilled managerial staff and engineers and moreover has a revolutionary PLI scheme focusing mainly on EV sector with huge tax benefits. You may ask, how much? Over $875.5 million just for one Company. and I quote:

Total Incentive per entire Group company(ies) is capped at ₹ 6,485crore(25% of total incentives outlay under this Scheme). The cap on incentive payable to the approved company or Group of company(ies) as stated above would be incorporated as part of the agreement.

Link for the Article from where the above quote is taken:

PRODUCTION LINKED INCENTIVE (PLI) SCHEME FOR AUTOMOBILE AND AUTO COMPONENT INDUSTRY

Why so over indulgence in China which has a higher labor cost(on papers) and a one party hush-it-all regime.
Then there are cases of forced labor from Xinjiang and child labor which, albeit not on papers, make the production dirt cheap in China and believe me when I say, a lot of big names have been brought up in this horrific practice.


Child labour growing in Apple supply chain
Child labour uncovered in Apple's supply chain
China: 83 major brands implicated in report on forced labour of ethnic minorities from Xinjiang

So, what is it that makes Tesla that special that it needs to be awarded with tax benefits and not, say Hyundai who is equally acing in EV tech if not more. 'Cause to be honest, when that mass EV revolution comes, a lot of folks would be sitting inside a Kona or a ZS or maybe even Tata Sierra or an all blue XUV7OO/9OO than say a $75,000 Model 3 Top variant(Personal Opinion) sans the tax benefits.

So much for the short post.

[officer416]

Originally Posted by Turbanator

Will like to know which of the developed countries have grown by creating such Taxation barriers? USA, Japan, Germany or UK?


By having a company like Tesla, the whole EV things get a push, if you don’t thing that way, fair enough. In any case, Tesla is not something that majority of car buyers can afford at first place, not just in India but everywhere. And, then there are challenges on the EV front.

But as our economy grows and as more people can afford, buying an EV will help save us Oil and environment. My reasoning to support this segment with lower duties is purely from that prospective.


No, they are just trying to limit the risks. It’s not as if Tesla is going to displace Maruti or any other Indian manufacturer. Their cheapest car at Zero Duties, just with current GST will be over Rs 40Lac. At these prices, the best they can hope is about 1000 units a month and given the initial costs, I doubt they can make money even with Zero Duties. But, going forward, they can do something different for us, with less electronics/ automation, probably have a different model for countries like ours and eventually build something locally.

What they & others are asking is relaxation for some time/ number of units to test our market before larger investments are made. Fair demand in my opinion but I am not good in economics, so the people who take such decisions will know far better.

Majority of the countries you have mentioned have grown because of rapid industrialization and that too majorly supported by local brands. So much so that the top selling vehicles in the US were local brands.

US top selling vehicle Ford F-Series, followed by RAM (Stellantis) GM and Toyota. Whereas Toyota has a plant in Texas and other states.
Japan - Toyota Yaris top selling car followed by vehicles from Suzuki and Honda. All brands are Japanese.
Germany - Top selling brands in Germany VW, BMW, Mercedes and Audi. All German manufacturers, now people mock German brands for unreliability, but in that case Germany should be filled with Hondas and Toyotas. On top of that Germany charges high import tariffs on imported cars, Merkel did the same thing that India did, they were ready to give incentives on EV’s if they are produced locally.
South Korea: Top selling car Hyundai Porter II, second best selling car another Hyundai. Another local brand leading the way.
France: Top selling brands Renault, Dacia and Peugeot, all French brands.
UK: Best selling car Vauxhall Corsa produced locally. That is a big achievement for the UK considering whatever were once iconic British brands are now owned by foreign companies. Still they do their best to keep the production facilities in their country, ask Tata about it.

So to say that the auto industry in these countries have grown only because they didn’t have any import barriers is incorrect. In fact during the Trump administration the government outright warned local auto manufacturers with heavy import duties if they import foreign produced vehicles. After which GM and other companies pledged to invest 2 billions dollars locally to develop new factories.

Secondly, we say that we need Tesla to boost EV sales in India. So what US company came to India that helped boost sales of Ather Energy, Ola Electric Scooters and other local electric two wheeler manufacturers?
The idea, that some foreign company will come to India and set up shop, then we will be motivated to adapt to any new technology is a thought of yesteryears. I see people using UPI service through BHIM, Paytm and other apps all around me.
Do you think we should have waited for Apple to first launch Apple Pay in India for us to get a boost for adopting mobile payments?

Thirdly, as much as I like Elon Musk and the marketing genius he is, where he himself is the sole brand ambassador for all his companies, one needs to understand that underneath he is a shrewd businessman. When California was under lockdown during the first Covid wave, the state decided to gradually lift the lockdown in a phased manner. Because his factory didn’t fall in the announced category, the guy went on a tirade on twitter and threatened to open the factory without taking any clearance from local authorities.
So his tactics where he puts pressure on the governments through social media to get his way is nothing new. His twitter army worldwide then starts pushing his agenda, the Pathole guy’s twitter account is filled with 99.99% of Elon worshiping tweets.

This is a misconception that having Tesla in India will boost EV adoption in India. Tesla doesn’t share its tech with other companies, nor does it share any source code of its software with other manufacturers that can help them produce better EV’s. You will say what company does that? Rimac does it. That is why you see it powering cars all the way from Hyundai Kona to Porsche Taycan. One will say yes because both companies invested in it. But that was way after the company already produced working concept cars and Rimac itself wanted to be a supplier.
Just because Ducati launched its motorcycles in India, that doesn’t mean it helped Bajaj or Hero sell more units or change the behavior of Indian consumers in any way when it comes to buying two wheelers.

Tesla has no plans to set up a plant in India whether the government removes duty or not. Tesla has already set up China as a hub for international exports. The factory there is expanding further with new land acquisitions.
They will produce a cheaper car initially for the Chinese market, and then later bring that car to India and other markets like Brazil. Even Australia taxes them with heavy import duties.

Apart from that it becomes a political nightmare when it comes foreign relations. You allow Tesla to import cars with import duties waived, all German brands go back to their governments complaining of unfair trade practices. Look how Visa and Mastercard are lobbying the US government because they feel Rupay cards are getting preferential treatment in India. They even labeled it as payment nationalism.

Lastly, if you want to know what happens when a country doesn’t take proactive measures to protect its industry, you can become a country like Canada. The so-called developed country is so dependent on the US that it pays manufacturers from its pocket to stay in the country and produce cars to protect jobs. Technically, taxpayers are paying from their own pocket to save their own jobs. Every few years Ford and Chrysler threaten to leave the country and the government panics to provide bailouts to make them stay.
We don’t want India to turn into an economy like that.

Tata and MG are already way ahead of Tesla when it comes to understanding the Indian usage of an EV. They have data and know already what changes they need to make to the car for Indian buyers. Nexon EV’s growing sales are a perfect example that Indians are not waiting for Tesla’s to come in to motivate them to buy an EV.

99% of the people on Twitter asking for Tesla to come to India aren’t actual buyers, they just want to see it in a store, play with the touchscreen and then come back to start the next round of complaints that it is too expensive.
Reminds me of a story once where I was speaking to a senior executive of Mazda, he told me that there was high demand on social media from enthusiasts to launch manual Mazda 3 in Canada. When they followed through, they couldn't even sell one third of the units that they brought in. So next time when enthusiasts requested to bring in the MAZDASPEED 3 version, the answer was strict no from the head office.

[GutsyGibbon]

Originally Posted by Moto_Bear

There's a brilliant video on Youtube why just through an increase in the number of chargers won't solve much and given that the Tesla chargers cost a fortune to install, I don't see the situation improve unless some domestic player such as Tata jumps in.

I wasn't asking for Tesla chargers. It doesn't even make sense for the Govt. to promote charging network that is restricted to one OEM like Tesla. Which is why I was calling for standardization, where the chargers can be used by all EV entrants. Nexon EV, Kona, and everyone. I do not see any OEMs prepared to spend their money to build a nationwide network of fast chargers.

The fast charger connectivity standard is spelt out by the govt. and the interface to the grid is spelt out. Bigger players like Adani power, Reliance JIO-BP need to own and operate the fast charging stations. The EV buyer would be able to use any fast charging station, just like fueling at any gas station.

When I look for chargers on Tata motors website, I see hotels, dealerships, with one or two trickle chargers. Zeon and BluSmart are also 25Kw chargers (correct me if I am wrong). I have such a 50Amp Level 2 charger at home. A fragmented and inferior network will really do more harm in a country that is already skeptical of EVs.