American electric vehicle giant Tesla remains committed to penetrating the Indian market under the new manufacturing policy despite CEO Elon Musk’s delayed meeting with the Prime Minister, CNBC-TV18 reports, citing sources familiar with the matter.
Tesla to still pursue the Indian market
According to the report, Tesla’s plans for the Indian market remain on track despite CEO Musk’s decision to postpone his visit to the country.
Tesla’s Chief Sourcing Officer will reportedly travel to India to have meetings with leading local component manufacturers. The American EV maker aims to boost its component sourcing from Indian companies to a whopping $15 billion over the next five years, as per one of the sources.
Tesla recently partnered with Tata Electronics for component sourcing. Meanwhile, one of the company’s largest Indian suppliers, Sona Comstar, has launched a new production plant in Mexico to support demand in the North American market.
Meanwhile, the Tesla team continues to scout potential production sites in the country for the future Giga India.
Potential reasons behind CEO Musk’s India trip postponement
Tesla CEO Elon Musk explained that his decision to postpone his set visit to India was due to “heavy obligations” at the electric automaker.
“Unfortunately, very heavy Tesla obligations require that the visit to India be delayed, but I do very much look forward to visiting later this year.”
Tesla CEO Musk said in a post on X on April 20
Tesla has suffered a notable decline in some key markets, including China. It even lost the EV crown to BYD in Q4 2023. In addition, it also witnessed a 40% drop in stock price in 2024. More recently, it issued a safety recall for about 4,000 Cybertrucks over accelerator pedal defects. These matters are just among the long list of challenges Tesla faces until today, requiring CEO Musk’s focus.
However, industry insiders and analysts speculate that the ongoing elections in India are the primary reason behind the Tesla boss’s postponed visit.
CEO Musk is trying to avoid involvement in BJP and opposition politics during the election season.
Analysts’ outlook
Industry analysts remain optimistic that Tesla will ultimately establish an electric vehicle factory in India, the world’s third-largest auto market.
S&P Global Director of Mobility Puneet Gupta claims that Tesla would need to penetrate India to boost its electric vehicle sales. Investing in the Indian EV industry is apparently crucial for the company to regain profitability after suffering from recent declines due to aggressive price cuts.
“They need a scale in India quickly so that they have a grip on the system. [Perhaps] they want to hire a local partner to minimise their risk.”
Puneet Gupta, S&P Global Director of Mobility (via SCMP)
S&P Global executive further noted that the Musk-led company would need the support of a local partner to deal with potential challenges while launching businesses in Indian states. Director Gupta also presumes that Tesla might still be anticipating whether the next Indian government will revise the relevant policies.
Independent auto analyst Suraj Ghosh also said that the electric vehicle giant must establish a presence in the Indian market, whether with new affordable models or current S3XY EVs for a lower price.
“India is one of the most important and fastest-growing markets, and eventually Tesla has to be here. India is going to be an important manufacturing hub and an important sales point.”
Independent auto analyst Suraj Ghosh
We can expect Tesla to announce its official plans in the Indian market once it accepts the tax incentives under the newly announced electric vehicle policy.
