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April 26, 2024

Tesla’s Future in India: Analysts Optimistic Despite Elon Musk’s Deferred Visit with PM Modi

Despite Tesla CEO Elon Musk deferring his highly anticipated India visit this week, analysts remain bullish on the company’s future prospects in the country’s burgeoning electric vehicle (EV) market. Musk’s postponement of the visit, which was speculated to include discussions with Prime Minister Narendra Modi, has not dampened the enthusiasm surrounding Tesla’s potential presence in India.

Analysts attribute Musk’s decision to postpone his visit to the ongoing Lok Sabha elections, during which the government’s focus is primarily on campaigning, making it challenging to announce significant policy changes. However, despite the delay, experts remain optimistic about Tesla’s eventual establishment in India, particularly after recent announcements by the Indian government regarding lower import taxes on certain electric vehicles.

While Musk cited “very heavy Tesla obligations” for the deferment, speculation arose around political shifts, with Congress leader Jairam Ramesh suggesting it was a response to an outgoing administration. Ramesh emphasized that the Indian government’s support for electric vehicles would continue, predicting a warm welcome for Musk from the new administration.

Union Finance Minister Nirmala Sitharaman reaffirmed the government’s commitment to attracting investments, especially from major companies like Tesla. She highlighted India’s attractiveness for manufacturing and services, particularly in light of concerns about doing business in China.

Analysts emphasize the importance of Tesla tapping into the Indian market for its global growth strategy, especially with increasing pressure on profitability worldwide. Puneet Gupta of S&P Global noted that India’s significance as a market cannot be overstated for Tesla’s future growth.

Concerns over India’s high import taxes prompted the government to introduce incentives for EV manufacturing, aligning with Tesla’s ambitions. Tesla’s announcement of low-cost models further underscores its commitment to the Indian market.

Automobile industry analyst Suraj Ghosh asserts that Tesla’s entry into India is inevitable, irrespective of specific car models. He emphasizes India’s rapid growth and its potential as both a manufacturing hub and a significant sales market for Tesla.

Ghosh predicts that once Tesla accepts the tax incentives under India’s new electric vehicle policy, the company will announce plans to establish a manufacturing plant in the country. With a foothold established, Tesla could potentially expand into the luxury car segment within the Indian market.

Ghosh also anticipates Tesla’s vehicles occupying a favorable pricing spectrum, likely falling within the range of Rs 35 lakh to Rs 40 lakh, making them competitive and appealing to Indian consumers.

In conclusion, despite Elon Musk’s deferred visit to India, analysts remain optimistic about Tesla’s future in the country, anticipating the

Jhumpa Lahiri

Jhumpa Lahiri

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