NEW DELHI (INDIA) – US electric carmaker Tesla Inc which is gearing up for launch in India might remain a niche player for years, catering only to the creamy layer in the world’s second-most populous nation.
Electric vehicle (EV) market in India is still at it’s teething stage and accounted for only 5,000 out of a total 2.4 million cars sold in the country last year. A lack of local production of components and batteries, negligible charging infrastructure and the high cost of EVs mean there have been few takers in the price-conscious market.
One might have to wait and see how Tesla’s sought-after and expensive autonomous driving features will work on India’s congested roads.
Ammar Master, a forecaster at consultancy LMC Automotive, said he expects Tesla to annually sell only 50-100 of its Model 3 electric sedans in India, at least in the first five years.
“As a country, India is still not so environmentally conscious to pay that much of a premium,” Master said.
“It always comes down to the price point. There will be some high net-worth individuals like movie stars and top business executives who will look at it for the brand value. But then, how many buyers are there?”
Tesla plans to import and sell the Model 3 in India for around $65,000-$75,000 – roughly double the price in the US market, sources said.
With this price range Tesla will compete in India’s even smaller luxury EV segment that has recently started seeing interest from the likes of Jaguar Land Rover (JLR) and Daimler’s Mercedes Benz.
The Mercedes Benz EQC, India’s first luxury EV launched in October for $136,000, and has since sold 31 units, according to auto researcher JATO Dynamics. British luxury carmarker JLR, owned by India’s Tata Motors, plans to launch its I-PACE EV before March. It sells in the United States for around $70,000.
Although India’s road infrastructure has improved in recent years, it lacks traffic discipline . Auto analysts say that means many of Tesla’s features like the automatic lane changing function will be tough to deploy on crowded Indian streets.
Stray animals, including cattle, and potholes on the road are a further problem.
“Most of Tesla’s high technology features will be redundant and users will not get the bang for the buck despite paying premium prices”, said Ravi Bhatia, president for India at JATO Dynamics.
