There have been many months of waiting around. The Indian government first insisted, roughly a year ago, that if Tesla wanted to sell cars in the country, which is home to the third-largest automobile market in the world, it had to establish a local manufacturing facility there. Soon after, Tesla‘s billionaire CEO Elon Musk declared that his business would not establish a manufacturing facility anywhere it was not first permitted to sell and service vehicles.
In spite of India’s efforts to position itself as a global manufacturing base and, more specifically, as a viable alternative to China, the deadlock meant that Tesla’s India proposal had been postponed.
Tesla’s Effect on Mercedes
Tesla is the global leader in EVs and has a substantial lead over all other rivals, many of which trace their respective history back several decades. Cars like Model 3 and Model Y are best-sellers not just among EVs but are now being counted high – in terms of sheer sales volumes – among vehicles across powertrains. CEO Elon Musk confirmed after his recent meeting with Prime Minister Narendra Modi that Tesla will make substantial investments in India. But Mercedes has a steadfast plan the world over – clean mobility with strong performance and the opulence level that has long defined the brand.
Mercedes intends to keep up its strong drive in India across all powertrains, including EVs. Lance Bennett, Vice-President for Sales and Marketing at Mercedes-Benz India, recently spoke with HT Auto and said, “We have a clear EV strategy here and we will follow it while obviously adapting to the market and the way it is developing.” Tesla announced its entry into India: “This news means no change for us and our strategy.”
Bennett continues by acknowledging that more EV producers will be good news for the Indian market as a whole. “I think the electric car market is competitive.” The market is excellent for customers as well as for the market, he said. “We observe strong demand for EQ goods. We are rapidly approaching a five percent electric penetration rate. Around 25% of our sales (in India) are expected to be in electrics over the next four years.
Mercedes is making a significant investment in an electric future, but the corporation is adamant about having a broad and diverse portfolio. As its third new AMG model of the year in India, the company unveiled the SL 55 AMG Rodster on Thursday. While the 2023 GLC SUV waits in the wings for its India debut, the revised G-Class Adventure variant has also been released.
Challenges for Tesla
The government will have a huge opportunity to declare India’s entry into the world of manufacturing by luring a business with the reputation of Tesla to establish a presence in India. Tesla is frequently compared to Apple, according to Malhotra. “Apple has started producing in India, and this has had a significant impact on the ecosystem. With Tesla, the same is possible. However, the government must establish fair competition in India for foreign luxury automakers. Benefits that are not available to other manufacturers cannot be given to Tesla.
In an effort to entice Tesla, the government has been promoting a production-linked plan for the car industry and is even thinking about increasing the outlay. The current budget for advanced chemical cell batteries is Rs. 18,100 crore, and Rs. 25,938 crore is allocated for vehicles and auto parts. The government has also disclosed a plan to build a nationwide pricing infrastructure for Rs 1,000 crore.
In the end, Sharma says, “Tesla’s success in the Indian market will depend on a variety of factors, including its ability to offer competitively priced models, develop reliable charging infrastructure, meet localization needs, and effectively compete with other premium brands. It’s also crucial to keep in mind that market dynamics and consumer tastes are subject to change over time, and that affordability may become an even more important consideration as India’s electric car market develops.
