HomeBusinessIn India, it's advantage...

In India, it’s advantage Tesla as Chinese automakers face heat

NEW DELHI, Aug 3 (Reuters) – China’s loss in India could be Elon Musk’s gain.

Tesla (TSLA.O) has had a red-carpet welcome from India for its proposal to invest in the country, while its largest rival in electric vehicles, China’s BYD (002594.SZ), has been stopped cold by increased scrutiny from New Delhi.

The result could be an opening for Tesla to negotiate terms for an entry to the world’s third-largest auto market without the competitive threat from BYD that it faces in other emerging markets, like Thailand.

“The future of who wins in India will have some bearing on who wins globally in the EV race,” said Jasmeet Khurana of the World Economic Forum.

Since a meeting between Musk and Indian Prime Minister Narendra Modi in June in New York, Tesla has fast-tracked closed-door discussions with Indian officials on a potential plant investment and plans to build a new low-cost $24,000 EV.

Those talks continued over the past week with Tesla discussing minute details of its plans to gain access to India’s fast-growing EV market, and Modi personally tracking developments, sources say.

Those meetings, though, have been strictly kept under wraps, with officials putting out no photos on social media of handshakes with executives which otherwise is a usual affair after high-profile meetings.

BYD, meanwhile, appears to be taking a backseat. Months after seeking clearance for its own $1 billion investment in India, BYD is no longer keen to pursue the approval, Reuters reported. In a further setback, BYD is facing an investigation over allegations that it underpaid import tax in India.

Among other concerns, Indian officials are worried about the national security implications of Chinese-made vehicles and the data they could collect. India is “uncomfortable with Chinese automakers,” an official said.

While all investments from China have faced tightened approval requirements in India since a border clash between the two in 2020, there could be an outsized effect on the developing market for EVs in India because of China’s dominance in battery materials, battery production and other technology.

Tesla, too, has Chinese suppliers that have helped it slash production costs at its Shanghai factory and it now wants to bring them to India – where it appears to have an upper hand in talks with New Delhi.

India has told Tesla it will allow its Chinese suppliers into the country if they forge partnerships with local firms, just like Apple did. But at the same time, India is hesitant on BYD’s $1-billion plan even though that too was proposed as a partnership with a domestic engineering firm.

The Global Times, a Chinese state-run newspaper, said the reported pushback on BYD’s investment plan “will lead to a chain reaction and deal a blow to the overall confidence of Chinese companies in investing India.”

BYD did not respond to requests for comment on the status of its India investment plan or the import tax claim. In a statement to Reuters, the company noted it had been active in the Indian market for 16 years and sells commercial vehicles and passenger cars there.

Tesla did not respond to a request for comment on its talks with Indian officials. Musk had said in June that Modi was “pushing us to make significant investments in India, which is something we intend to do.”


Tesla wants to sell 20 million cars globally by 2030, up from 1.31 million in 2022, but faces hurdles to expanding its Shanghai factory.

BYD was the world’s biggest seller of EVs and plug-in hybrids in 2022 with a total of 1.86 million units – the vast majority in China. It trails Tesla in terms of sales of fully electric cars.

“Tesla sees competition mainly with BYD, and both are expanding globally at great speed,” said Gaurav Vangaal of S&P Global Mobility.

“If they want volumes, they have to come to India,” he said, adding that with the government incentivising companies to build EVs locally, India can also serve as an export base.

Annual production of light electric vehicles in India is expected to rise to 1.4 million by 2030, close to 19% of total forecast production of 7.25 million, according to estimates by S&P Global Mobility. It was less than 50,000 in 2022.

India’s nascent EV market is dominated by local player Tata Motors (TAMO.NS), whose best-selling Nexon EV sells for as high as $19,000 while Chinese carmaker MG Motor’s ZS EV starts at $28,000 while BYD’s Atto 3 retails at around $41,000 in India.

Toyota Motor (7203.T), Hyundai Motor (005380.KS) and Kia (000270.KS) all sell mid-sized gasoline SUVs priced at around $24,000, Tesla’s identified entry point.

Tesla does not currently sell vehicles in India.

“Tesla has become a desirable product in name alone,” said Sam Fiorani of AutoForecast Solutions. “Add to that an affordable product tailored for the Indian market and it has the potential to be a hit locally.”

Reuters Graphics

Reporting by Aditi Shah, Aftab Ahmed and Aditya Kalra in New Delhi, additional reporting by Shivangi Acharya in New Delhi; Editing by Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

Aditya Kalra is the Company News Editor for Reuters in India, overseeing business coverage and reporting stories on some of the world’s biggest companies. He joined Reuters in 2008 and has in recent years written stories on challenges and strategies of a wide array of companies — from Amazon, Google and Walmart to Xiaomi, Starbucks and Reliance. He also extensively works on deeply-reported and investigative business stories.

Source link

Most Popular


Please enter your comment!
Please enter your name here

More from Author

Read Now

Why Sharon Osbourne Warns Against Ozempic After She Lost 42 Pounds – E! Online

Ozempic is no laughing matter for the comedian. Handler revealed her "anti-aging doctor" prescribed her the medication without realizing what the drug was. "I didn't even know I was on it," she said during the Jan. 25, 2023 episode of Call Her Daddy. "She said, 'If you ever...

PlayStation leader Jim Ryan to retire after 28 years with Sony

Jim Ryan, the head of PlayStation and CEO of Sony, is stepping down. In a press release on Wednesday, Sony announced that Ryan will retire in March 2024, while Sony Group Corporation president and chief operating officer Hiroki Totoki will become the interim CEO of Sony...

Saleh, players OK with Rodgers calling out Jets

Rich CiminiESPN Staff WriterSep 27, 2023, 05:49 PM ET3 Minute ReadFLORHAM PARK, N.J. -- New York Jets coach Robert Saleh and key veteran leaders had no problem with injured quarterback Aaron Rodgers -- in absentia -- calling out the team for its sideline squabbles. They agreed...

NFL Injuries Week 4: Tracking Every Injury, Including the Latest on Jaylen Waddle, Austin Ekeler, David Montgomery, and Christian Watson

Injuries are an unfortunate reality of NFL life, but everyone who follows the league — fantasy football players, sports bettors, and fans of teams — wants the latest health information. In that vein, we’re tracking every NFL injury ahead of Week 4. Let’s review the injury report...

MTG and Boebert Try to Out-Troll Each Other Days Away From a Shutdown

With a government shutdown four days away, thanks largely to House Republicans’ inability to stop fighting amongst themselves, far-right Reps. Marjorie Taylor Greene and Lauren Boebert thought it important to focus on their pet grievances on Wednesday. Greene successfully used the Holman rule to attach an...

Lina Khan vs. Jeff Bezos: This Is Big Tech’s Real Cage Match

Jeff Bezos made his fortune with one truly big idea: What if a retailer did everything possible to make customers happy?His forcefully nurtured creation, Amazon, sold as many items as possible as cheaply as possible and delivered them as quickly as possible. The result is that...

Barry Manilow Beats Elvis Presley’s Record for Most Shows at the Westgate Las Vegas Resort & Casino

<!-- --> Barry Manilow Beats Elvis Presley's Record for Most Shows at Westgate Las Vegas ...

Counter-Strike 2 Just Officially Launched – IGN

Valve surprised everyone when it announced earlier this year that it was making a Counter-Strike 2 - and after months of limited testing, it's now available for PC players via Steam. The company announced the news with a new trailer today, which you can watch below.pic.twitter.com/SM57ZVCTmI—...

Latest Hipkins v Luxon debate: Former Cabinet ministers’ verdicts

Two former Cabinet ministers have given their verdicts after last night's Newshub leaders' debate, with both giving Labour leader Chris Hipkins credit but projecting a loss for his party in the upcoming election.Iain Lees-Galloway (Labour) and Wayne Mapp (National) joined Breakfast this morning to discuss the...

WSJ News Exclusive | UAW Threatens More Strikes as GM, Stellantis Try to Keep Repair Parts Flowing

UAW Threatens More Strikes as GM, Stellantis Try to Keep Repair Parts Flowing - WSJ  The Wall Street JournalUAW Auto strike affecting San Diego auto repair shops, customers  CBS 8 San DiegoUAW Strike Has the Big 3 Automakers Scrambling for Parts – MishTalk  Mish TalkCar shop managers concerned over...