In November last year Elon Musk, the founder of Tesla, one of the world’s leading electric car makers, replied to a user’s Tweet that the company is likely to hit the Indian market following their huge profit margin in the previous quarter.
Musk said that the company would soon consider expansion of its work to attain a partial presence in Asia, South America, and Africa by the end of this year. Presently its market share is limited to North America and to certain South-Asin countries like China, Japan and Hong Kong where the company have their regional office.
Switching to online store
On March 18, Musk further reiterated his interest to enter India market in yet another Tweet and reassured Twitteratis that he would love to enter the Indian market this year and if not for this year, the company will certainly do it within the next year.
“Would love to be there this year. If not, definitely next!”, Musk tweeted
Though Tesla does not have regional offices in India, their Tesla Model 3, a medium-size premium sedan priced at ₹ 75 L, is likely to be available in India from June this year, a leading website notes.
Building more optimism for its users, on March 4, in a dramatic turn of events, the company announced that it is planning to shut down its physical store and will sell its Model 3 via online store in order to cut down on the expenditure. The company said that the model will be available online and that doorstep delivery would be made for its customers.
“It’s 2019. People want to buy online,” Elon Musk, the CEO of Tesla said post its announcement to go online.
This decision by the company brought cheers among auto-enthusiasts in the country and some strongly feel the car will be available to be purchased through its online store and its affordability is another advantage.
While the standard base model for Model 3 is $35,000, the company will also offer the model at $37,000 with a premium interior and better acceleration, thus making it the cheapest ever model to be available of the high-end cars.
However, in a dramatic turn of events, Tesla recently reversed its shut down its stores stating that the new plan will lead to a 3 per cent hike in the cost of its vehicles.
“As a result of keeping significantly more stores open, Tesla will have to raise vehicles price by about three per cent on average worldwide,” it said in a statement. “In other words, we will only close about half as many stores, but the cost savings are therefore only about half,” it added. However, it stated that the new Model 3 will not be affected by this variation.
Will it be a reality?
Earlier, Musk has been critical about government for its stringent rules thus restricting the company’s entry to the Indian market. As a result of this, the company closed a deal of $5 billion factory in China, making its first-ever manufacturing facility outside of its headquarters in India.
In addition, the present ruling government has been trying to woo the company to set up its unit in India. Following the losing of the bid to China for its manufacturing unit, the Union Minister for Road Transport & Highways of said to a leading newspaper, “If they are coming, if they are ready to come, we will welcome, we are ready to offer them land and all type of help. I requested them, I met them in America, but their first point was China at that time,” Gadkari said after India lost the bid despite months-long deliberations with the company.
With the government pushing for Make in India, it has been taking deliberate steps to do away with bureaucratic red-tape that has been stalling the entering of these MNC in India.
Furthermore, as the auto market is forecasted to grow by leaps and bounds and demand for electric vehicles on the rise in India, Tesla is likely to face competition from regional players. Key E-vehicle makers like Mahindra and Tata have witnessed success on a smaller scale across the country. Though Tesla has to its advantage possessing its state-of-the-art technology and customisation, the cost attached to each car can possess a problem.
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Akshaya Asokan works as a Technology Journalist at Analytics India Magazine. She has previously worked with IDG Media and The New Indian Express. When not writing, she can be seen either reading or staring at a flower.