Startup Inc Charged up Over Tesla En­try

Cu­rios­ity peaks among well-heeled In­di­ans as Musk co an­nounces plan to drive in its cheap­est car Model 3, but chal­lenges re­main — from price-con­scious buy­ers to lack of in­fra

The Economic Times - - Front Page - Our Bureaus

Ben­galuru | Mum­bai | Chen­nai: Fans of Tesla, dubbed the Ap­ple of the au­to­mo­tive world, are lin­ing up for a chance to buy the Model 3 elec­tric sedan af­ter the US firm an­nounced on Thurs­day night that it would be launch­ing its cheap­est car yet in In­dia.

The car it­self will not be avail­able for some two years, but Tesla sig­nalled that it will start the ground­work for a launch by set­ting up its ‘su­per­charger’ net­work of charg­ing sta­tions across In­dia. The much-awaited an­nounce­ment was made by the com­pany’s founder Elon Musk in a tweet: “Adding sev­eral more coun­tries to Model 3 page tonight. Check for de­tails, but will in­clude In­dia, Brazil, SA, SK, NZ, Sing & Ire­land.”

Pro­duc­tion of the car, whose price starts at $35,000 (.`23.2 lakh), is sched­uled to be­gin in late 2017, Tesla said on its web­site. De­liv­er­ies will be­gin in North Amer­ica start­ing on the west coast. “As we con­tinue to ramp pro­duc­tion, we will be­gin de­liv­er­ies in Europe, APAC and right-hand drive mar­kets,” the com­pany said.

Tesla is re­garded as an iconic firm be­cause it is dis­rupt­ing the auto in­dus­try, where trans­for­ma­tional change has been slow to take hold. Tesla, whose founder Musk is also shak­ing up space trans­porta­tion and so­lar en­ergy, ticks all the right boxes: its cars don’t burn fos­sil fu­els, they look good, run fast, have long range and the com­pany is based in cool Sil­i­con Val­ley to boot. “The Model 3 has a po­ten­tial to dra­mat­i­cally shift the mar­ket per­spec­tive on elec­tric cars from niche to main­stream,” said Chetan Maini, who founded Reva Elec­tric Car Com­pany, In­dia’s first elec­tric car­maker, which was ac­quired by the Mahin­dra Group. “Though main­stream for the US, (it) is bor­der­line lux­ury in In­dia. Here, I think a lot of lux­ury cus­tomers will look at Tesla as an op­tion in the fu­ture,” said Maini.

Tesla is said to have got 135,000 reser­va­tions dur­ing the first day of or­der­ing for the Model 3

Maini has put in an or­der for the car with a down pay­ment of the equiv­a­lent of $1,000.

Re­ports said Tesla se­cured about 135,000 reser­va­tions dur­ing the first day of or­der­ing for the Model 3.

Sev­eral well-heeled In­di­ans have al­ready gushed ad­mi­ra­tion for Tesla and Musk and joined the wait­ing list for the car. Among them is Vi­jay Shekhar Sharma, the founder of mo­bile mar­ket­place and pay­ments com­pany Paytm.

“I ac­tu­ally have been try­ing to get a Tesla ever since they launched a right-hand drive model,” said Sharma, who de­scribes him­self as a Musk ‘fan­boy’. Gam­ing en­tre­pre­neur Vishal Gon­dal and Mahesh Murthy, an early-stage in­vestor, on­line fash­ion por­tal Voonik’s founder Su­jay­ath Ali and Practo founder Shashank ND were among those from the startup world who lined up for a chance to own the Model 3. Bio­con founder Ki­ran Mazum­dar-Shaw got into the act, and into the spirit of April Fools’ Day, tweet­ing that she was “priv­i­leged” to have done the first test drive of the car on the busy Ho­sur Road in Ben­galuru.

Tarun Me­hta, a co­founder of Ather En­ergy that builds e-scoot­ers us­ing Lithium-ion bat­ter­ies, said Tesla’s en­try will have both sym­bolic and prac­ti­cal value. “The re­al­world ef­fect of Tesla’s en­try is that we will see In­dia’s large au­to­mo­tive com­po­nent mak­ing ecosys­tem gear­ing up for sup­ply­ing to elec­tric au­to­mo­biles too,” he said.


Tesla told ET that it was plan­ning to launch in In­dia in 2015, but did not fol­low up on it on con­cerns about high taxes for im­port­ing cars into In­dia. Prime Min­is­ter Naren­dra Modi made a stop at a Tesla fac­tory last year, an in­di­ca­tion that the ad­mi­ra­tion for the US en­tre­pre­neur ex­tends to the highest lev­els in In­dia. More­over, the courts in In­dia have been crack­ing down on ve­hic­u­lar pol­lu­tion, pro­vid­ing the right sort of en­vi­ron­ment for a com­pany such as Tesla to make its pres­ence felt in In­dia.

Tesla did not im­me­di­ately re­ply to ques­tions seek­ing de­tails about the launch.

While the price of a Model 3, the cheap­est Tesla yet, starts at $35,000, im­port du­ties as they stand now will make it much more ex­pen­sive. If the elec­tric car is im­ported into In­dia in one piece and costs over $40,000, the im­port duty will be 100%, said Su­gato Sen, deputy di­rec­tor-general of the So­ci­ety of In­dian Au­to­mo­bile Man­u­fac­tur­ers. Be­low $40,000, the im­port duty will be 60%. If it is a com­pletely-knocked-down unit that will be as­sem­bled here, it will be taxed at 10%. Arun Agar­wal, an au­to­mo­tive an­a­lyst with Ko­tak Se­cu­ri­ties, was of the view that de­spite all the ex­cite­ment now, Tesla will face sev­eral chal­lenges carv­ing out a niche in a price-con­scious mar­ket be­cause only a mi­nus­cule pro­por­tion of the 2.77 mil­lion cars sold in In­dia in 2015 were elec­tric. “This mar­ket­build­ing is apart from the mam­moth chal­lenge of set­ting up a charger net­work in an emerg­ing coun­try like In­dia,” he said.

Un­der­scor­ing the chal­lenge was Nis­san, which is al­ready present in In­dia, but has no plans to sell its elec­tric car Leaf here any time soon. Guil­laume Si­card, the pres­i­dent of Nis­san’s In­dia op­er­a­tions, told ET that the Leaf is be­ing launched in mar­kets that are putting in place the charg­ing in­fra­struc­ture and gov­ern­ment in­cen­tives to sup­port wide­spread adop­tion of elec­tric cars. “There are cur­rently no plans to in­tro­duce Leaf into In­dia,” he said.

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