Tesla Conducts Vehicle Benchmarking in India

Key Points

  • 🚗 Tesla is benchmarking cars in India, indicating potential market entry.
  • 🇮🇳 Discussions between Tesla and India have been ongoing for years, with recent developments suggesting progress.
  • 🏭 Testing of Model 3 and Model Y vehicles observed in India, potentially signaling serious interest in market entry.
  • 💼 Intensified talks this year suggest Tesla is considering a factory in India for a mass-market vehicle.
  • ⏳ While Tesla’s entry in India seems likely, no confirmation has been provided yet.
  • 🌍 Potential partnership with India could open new region of sales for Tesla.
  • 🏢 Tesla has established office space in India, further hinting at market entrance.
  • 🔧 Tesla China preparing to resume production at Gigafactory Shanghai’s Phase 1 battery plant for Model 3’s Project Highland update.
  • 🚗 Demand for Project Highland update prompting Tesla to increase battery production capacity.
  • 🏭 Giga Shanghai’s battery facilities could produce around 100,000 battery packs per month at full capacity.

Tesla’s vehicle benchmarking activities in India have generated considerable anticipation regarding the potential for the company’s market entry. However, there are several factors that warrant a measured level of excitement at this juncture.

Discussions between Tesla and India have spanned several years, with CEO Elon Musk and Prime Minister Narendra Modi’s initial meeting occurring in 2016 during Modi’s visit to Tesla’s Fremont Factory. Subsequent interactions between Modi, Musk, and other Tesla executives have maintained a level of dialogue, further fueling hopes for a potential collaboration that would establish Tesla’s presence in India.

This year has witnessed a heightened level of activity in this regard. Notably, recent sightings of Model 3 and Model Y vehicles undergoing benchmarking processes in India have intensified the speculation.

Testing has occurred previously for the automaker in India.

In mid-June 2021, Tesla had numerous Model 3 units in India for testing, according to local sources. Vehicles were there so they could obtain approval from the Automotive Research Association of India, also known as ARAI.

Ultimately, these tests fell short of establishing Tesla’s market entry, and not because they were not compliant. Tesla and India had still felt differences in terms of what was reasonable for the automaker’s requests for a reduction in import duties, which would double the price of its vehicles.

India was not interested in having Tesla test demand by importing cars from China. The country’s government has funneled billions into the Made in India campaign, which emphasizes the importance of domestic manufacturing across nearly all sectors to help support local industry and the economy.

But based on meetings earlier this year between Musk and Modi, these differences may have been pushed aside, and things are getting more serious than ever before.

Tesla is already in talks to open a factory in India that would produce a $24,000 mass-market vehicle, some reports have indicated.

Additionally, Musk has said he is “confident Tesla will be in India and that he is hopeful “we’ll be able to announce something in the not-too-distant future.”

Although it seems likely Tesla will finally make its entry in India at some point in the near future, there is no indication that it is solidified as of yet.

However, even the future rivals of Tesla are already acknowledging the automaker is arriving, and they are preparing to duel with it as EV competition continues to ramp significantly.

Earlier this month, Mahindra Group CEO Anish Shah said:

“Tesla or anyone else coming in does not faze us. At one point, Mahindra was written off when all the global majors were coming into India. Today, we continue to have the number one market share in SUVs from a revenue standpoint.”

If anything is to come from the potential partnership between India and Tesla, which would see the EV maker’s vehicles finally arrive, the automaker stands to gain a new region of potential sales, which is one of the reasons Baird recommended Tesla in its “Best Ideas” list.

Tesla has established some office space in India as well, marking another indication that market entrance is potentially imminent.

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