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
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.
ADMIRATION FOR TESLA
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.