Tesla will be selling its electric vehicles in India, according to a Tweet.
The nation of India is vast market with a growing population and economy, and very few EV offerings in the market, and Tesla could be well positioned to make a splash there.
According to a Feb. 7 Twitter response to a question by CEO Elon Musk, that will be taking place this year:
Like China, India has put in place incentives to get automakers to build EVs, and import them, in the country. The country’s renewable energy ministry launched a program in 2010 that included a reduction of battery import duties from 26 percent to 4 percent, and consumer price rebates of up to 20 percent.
India is expected to surpass China soon by hosting the world’s largest population at 1.25 billion people. Its transport industry contributes about 5.5 percent to the nation’s GDP, according to Gas 2.0.
The country faces increased traffic congestion and air pollution as its citizenry moves to cites for jobs, similar to China and other emerging economies. Poorly developed roadways and infrastructure would be another hurdle for Tesla to clear.
Most Indian consumers are likely to be much more concerned about the cost of transportation than the brand appeal of Tesla’s expensive Model S and Model X models; or the environmental contributions. Perhaps the more affordable Model 3 sedan would more attractive in the market.
Finding a charging infrastructure will also be an issue blocking car shoppers. Tesla would have to consider installing its Superchargers in the country, as it’s currently deploying throughout China.
The market could offer huge potential in coming years for Tesla and other foreign automakers. Indian carmaker Mahindra has been selling its e20 small electric car in the country, and its eVerito electric sedan, but there are few import EVs to choose from.
Musk has been thinking about going to India for a few years now. In 2015, he mentioned setting up a Gigafactory in that country.
Tesla will be building a $9 billion manufacturing plant in Asia sometime soon, according to a published report. Tesla had plans in place to build a factory in China, a person close to the matter told Bloomberg last year. That’s yet to happen, thought the company had announced it would start the process during 2016.
One challenge for Tesla going that route would be equipping the new factory in China to build cars with steering wheels on the left-hand side for the China market, and on the right-hand side for the India market. That’s similar to production planning global automakers have adopted for serving the UK market and the rest of Europe.
India has expressed interest in Tesla setting up shop there and contributing to the country’s clean air and renewable energy campaigns.
Indian Prime Minister Narendra Modi and a delegation toured the Tesla’s California corporate campus in fall 2016. As a result of the visit, Tesla was invited to be a part of India’s strategy to become a renewable energy hub. Musk has proved to be committed to renewable energy through Tesla’s investments in SolarCity and Tesla Energy.
The Indian delegation was particularly interested in Tesla’s Powerwall energy storage product as part of its own renewable energy campaign. The country has a serious problem to overcome in distributing energy evenly, and affordably, across its villages and cities. Powerwall could offer a solution.