A month after some of Tesla¡¯s officials visited India to meet the govt and work out plans for the EV giant¡¯s entry into India, Elon Musk¡¯s recent meeting with India¡¯s PM Narendra Modi in the US seems to have all but confirmed Tesla's much anticipated entry into India.?
The world¡¯s richest person has not only announced that he is a fan of PM Modi, but also said that Tesla¡¯s much-awaited entry into India will happen as soon as humanly possible. After meeting PM Modi, Musk said he plans to visit India in 2024.
The billionaire had earlier said he¡¯ll likely pick a new Tesla factory location by the end of the year after announcing plans to set up a factory in Mexico earlier this year.?
¡°I am actually incredibly excited about the future of India. I think India has more promise than any other large country in the world,¡± the world¡¯s richest man, with a net worth of $246 billion, said, as per Forbes.
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Given that India is currently the world¡¯s fastest-growing large economy, it¡¯s not just Tesla that Musk is focusing on as part of his India plans. Already, the 51-year-old billionaire has a presence in India with Twitter and is now also firming up plans to launch his satellite-based internet service, Starlink, in the country.
Starlink is well-known for providing high-speed internet access to remote locations thanks to the world¡¯s largest constellation of satellites operating in a low orbit around the Earth. ¡°The Starlink internet, which I think can be incredibly helpful for remote or rural villages where they perhaps either may have no access to the internet or the internet is very expensive and slow,¡± Musk said.
Starlink had earlier planned to begin services in India and even began taking pre-bookings in March 2021. That plan fell through after the country¡¯s telecom department sought various approvals, and even asked the company to refund the booking amount. SpaceX, which runs Starlink, has now applied for global mobile personal communication by satellite services (GMPCS) licence to start operations.
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Meanwhile, Elon Musk has also pointed out that Twitter will continue to comply with the prevailing rules in the country to avoid shutting down. Musk¡¯s stand was in response to former Twitter CEO and co-founder Jack Dorsey¡¯s comments that the Indian government threatened to shut Twitter and raid the houses of its employees unless it complied with orders to restrict accounts that were critical of it during the farmer protests in 2021.
¡°Twitter does not have a choice but to obey local governments,¡± Musk said. ¡°If we don't obey local government laws, we will get shut down. So the best we can do is to work close to the law in any given country, it is impossible for us to do more than that. One cannot just apply America to Earth. We will do our best to provide free speech that is possible under the law.¡±
Musk¡¯s stand on Twitter is also significant, considering India has one of the world¡¯s largest penetration of smartphones, and the billionaire businessman has been fixated on monetising the social media giant, the report mentioned. India will have a billion smartphone users by 2026, according to Deloitte, much of which will be driven by sales in rural areas, providing a massive opportunity for Twitter to step up its India play.
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¡°India offers lower labour and manufacturing costs compared to some other countries,¡± Harshvardhan Sharma, head of auto retail practice at Nomura Research Institute, recently said to Forbes. ¡°This could potentially reduce production costs for Tesla and make their vehicles more competitive in terms of pricing. Establishing a manufacturing facility in India would also help overcome supply chain challenges such as long lead times and logistics issues.¡±
By 2030, about 40 to 45 percent of all two-wheelers and 15 to 20 percent of all four-wheelers (passenger vehicles) sold in India will be electric, according to a report by Bain & Co, while the government wants EV penetration to hit 40 percent for buses, 30 percent for private cars, 70 percent for commercial vehicles, and 80 percent for two-wheelers.
It means Tesla knows India remains a key market, both from a manufacturing and a sales point, especially since global economies are now adopting a China plus one strategy. ¡°If Tesla succeeds in producing and offering more affordable models, it could potentially address the affordability concerns in the Indian market,¡± Nomura's Sharma told Forbes India.
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