Tesla’s first pick-up truck, the Cybertruck, has had the auto industry in splits with its daring futuristic design and incredible utility. Its futuristic angular armoured vehicle demeanour is a massive break from what one expects of modern automobiles and it in the US it certainly is enticing with a starting price of US$ 49,900 (Rs 35,80,000). For many Indians too, this seems like a great proposition considering it’s rugged and eco-friendly makes it ideal for Indian conditions.
For years everyone has been asking, when will Tesla come to India? While India is taking baby steps towards embracing electric mobility, there is little or no traction which is why a brand like Tesla hasn’t launched in India despite its founder Elon Musk wanting it to.
Just to give some context around electric vehicles in India – there are 150 million drivers, but only 8,000 electric vehicles have been sold in the last six years. In comparison, India’s largest carmaker Maruti Suzuki sold more than 400,000 vehicles in Q1 of FY2020. India is ripe for electrification if you look at the numbers. However, this fact also underlines how herculean a task is to launch a brand like Tesla in India no matter how relevant a vehicle is the Cybertruck in India.
So, why is India an unviable market for Tesla?
- The first big hurdle for Tesla is that the Indian government levies taxes as high as 100% on importing finished cars. This automatically makes Tesla a less favourable option because the starting price of any Tesla vehicle has a 2x markup on the US price.
- The problem is that demand is exceedingly low which does not justify setting up a dedicated factory that can roll-out assembled cars. Local assembly will help them avoid sky-high import duty, but an upfront investment to open a production plant is illogical because demand is negligible. It is a chicken and egg problem which sees no resolution.
- The demand has also stagnated because India also lacks basic Electric Vehicle (EV) infrastructure. Charging stations are rare, practically non-existent. A host of companies are trying to create a network, but the chicken and egg problem shows its ugly face again. In the U.S., Tesla directly operates a wide network of charging stations that compliment car sales. Adding to this, third-party players are also gearing up and the market is maturing. This all fuels demand; nothing of the sort happens in India.
- In cities like Mumbai or Bengaluru, real estate is significantly expensive and there’s barely any place to park your car. How will these cities make way for dedicated parking lots with charging stations? If you want to make one, land acquisition costs are going to be tremendously high. And then if you look at pick up truck like the Cybertruk, you know it is not going to be a feasible car for cities that actually have few people that can afford it.
- Right now, the country is going through an economic slowdown and banks have limited credit available. Without access to credit, the masses can’t adopt an energy shift. Every developing country has progressed on the back of thermal energy and it involves burning of fossil fuels, India shall be no exception.
- A major chunk of Tesla’s unique features like Autopilot will be rendered useless in India because driving laws are rarely followed, highways are barely policed, and infrastructure is archaic. In fact, a feature like Autopilot will not even get regulatory approval. The Cybertruck is a perfect match for pothole-ridden Indian roads, but it’s also a huge truck. And that means it cannot swift through Indian traffic or even lanes.
- Lastly, the Cybertruck is a “pick-up truck” and this segment has negligible demand in India, unlike the US.
All these factors make it rather unlikely for Tesla and its Cybertruck to come to India anytime soon. Not just Tesla, but any other electric car maker would also have reservations about investing or expanding in the country. On top of this, the financial slowdown makes matters worse.