India is opening its doors to a number of foreign companies in a bid to boost economic growth. The nation grew at the slowest pace in the past six years in the latest quarter. The proposal to set up factories has been sent to a bunch of foreign companies including Tesla, Eli Lily & Co, Hanwa chemical corp among others.
Among all these companies, Tesla Motors is one for which several people are rooting for its arrival in India. However, there are several crucial factors that might prevent Tesla from setting up its Gigafactory in India anytime soon.
Here are five reasons why a Tesla Gigafactory in India is a far fetched dream:
5 Reasons Why Tesla Gigafactory in India Is Only A Dream
1. Tesla Gigafactory Berlin
Elon Musk announced Tesla Gigafactory Berlin at an event in Germany. The new Gigafactory factory will be set up near the new Berlin area and its construction will begin soon. Production capacity-wise, Tesla is already on its way to making 360,000-400,000 vehicles per year. With the support of the recently operational Shanghai Gigafactory and the Berlin Gigafactory in the near future, Tesla will easily be on its way to making a million vehicles per year.
Therefore adding another Gigafactory in India, where the demand for electric vehicles is already low, won’t make much sense.
2. India Won’t Allow Autonomous Vehicles
In a recent interview, India’s Union Transport Minister, Nitin Gadkari, announced that as long as he’s in power, India won’t allow autonomous vehicles to be operational for any huge scale commercial purpose in the country. This coincides with Elon Musk’s plan to make Tesla electric cars, particularly the Model 3, into a fully autonomous vehicle to be used as a Robo-Taxi.
This is why setting up a Tesla Gigafactory in India to manufacture electric cars with autonomous capabilities won’t make any sense.
3. Tesla Model 3 Uses Radar Technology
All Tesla electric cars, including the Tesla Model 3 comes fitted with RADAR to enable it to use autonomous technology. However, in India, RADAR is banned for use in any consumer-oriented product. This law is the reason why the latest Pixel 4, featuring an ultra-small RADAR chip, will never launch in India. Autonomous technology is one of the defining features of all Tesla electric cars and no recent plant from Tesla suggests that the company plans to integrate design changes into its electric cars, including Model 3, to be sold in India.
4. India Lacks Basic Charging Infrastructure
Electric cars in India are still up and coming, partly because the country lacks EV charging infrastructure. Even major Indian cities like New Delhi and Mumbai are devoid of easily accessible charging ports. India’s southern city Bengaluru has seen a surge in electric vehicles and charging ports, however, none of them even closely resembles the functionality of a Tesla Supercharging Station.
The latest Tesla Model 3 Performance variant comes with a huge 74 kWh lithium-ion battery pack, which will take a huge amount of time to charge with a normal charger.
5. Import Duty In India Is Too High
Tesla generates cash before setting up Gigafactory in any region with pre-selling imported cars, according to Elon Musk. This also gives Tesla an idea of the market demand and how viable their product would be in that region.
This strategy is particularly ineffective for Tesla in India because of the high import duties on cars made by foreign manufacturers. In a tweet, Elon mentioned the same reason.
For other countries, we pay in part for the local factory by selling cars there ahead of time. Also, gives a sense of demand. Current rules in India prevent that, but recent changes in sales tax give hope for future changes.
— Elon Musk (@elonmusk) August 1, 2019
In the near future, if India plans to loosen up some of its laws and improve its EV charging infrastructure, then maybe there’s a possibility that Tesla will show interest in the region. At the moment, the chances of any of that happening are slim to none.