Tesla to enter India

Tesla Motors, the world's most successful electric car maker, plans to enter the Indian market with its upcoming sedan that will be priced at less than half of its existing model even as the country's high import duty remains abig obstacle, a top executive said. Tesla is working on its third-generation car — a smaller and affordable four-door sedan code named Tesla Model 3 — to target emerging markets like India.

"Our target price for Model 3 is in the range of $30,000 to $40,000 (approx Rs 18-24 lakh) that makes it an ideal product in the luxury car segment," said Jay Vijayan, chief information officer at Tesla Motors. Its existing vehicle, Tesla Model S, is priced in excess of $100,000 (around rs 61 lakh). "India is a huge potential market, but we need to have more affordable and economical cars," Vijayan said. He said support from the Indian government like its US counterpart, where each electric car is bundled with at least $7,500 direct subsidy, would be a key to bring its cars to Indian customers.

"India has one of the highest import duty in the world — in excess of 100% — that goes against our principal of importing car directly from our plants at Freemont in the US or the assembly unit in Netherlands," Vijayan said.

"We have identified India is one of the potential markets in Asia to have a local assembly plant, but we need a definite policy from the government to support electric vehicles in the future," he said. Tesla plans to start a dialogue with the Indian government to rationalise import duty on electric cars and also develop a separate category for such vehicles. Tesla is currently selling Model S in only two counties in Asia. It sold over 5,000 cars in China and around 2,000 cars in Japan. India being the third largest automotive market in Asia is a natural destination in the future, company executives said.

"Tesla is not just a conventional electric car, but a full-scale motoring experience, that zooms 0-100 km per hour in mere 3.4 seconds and delivers the highest 500-km range on a single electric charge," Vijayan said. Electric cars have not gained much acceptance in India so far. Bangalore-based Reva, which is now part of Mahindra & Mahindra, had been selling electric cars in the country for more than a decade, but with little success. Lack of charging infrastructure, limited drivability and comparatively high price tags prevented electric cars from competing with petrol and diesel-run cars.

The Indian government has been planning to start National Electric Mobility Mission Plan, where it plans to sell 6-7 million of electric vehicles in the country by 2020. It is aimed at providing incentives to the tune of about Rs 14,000 crore for promotion of cleaner electric vehicle technologies with the aim of saving 2.2-2.5 million tonnes of fuel by the end of this decade. The policy is yet to be approved and implemented.