SOURCE / COMPANIES
Chinese experts say Tesla's success in China can't happen again in India due to consumption, infrastructure gaps
Published: Jan 21, 2021 09:53 PM

Made-in-China Tesla cars wait to be shipped overseas outside its factory in Shanghai in October 2020. Photo:cnsphoto



China's automobile experts said that it's impossible for India to copy Tesla's success in China, and the company's moves in India are just a "tiny, experimental program", after two Indian ports were reportedly competing to invite the US electric carmaker to locate its new plant there. 

According to media reports, two of India's top ports, Kandla and Mundra, are seeking to have Tesla to set up factories, after Elon Musk registered an office in Bengaluru, Karnataka in the company's efforts to expand its business in international markets. 

India's transport minister Nitin Gadkari told media earlier that Tesla is going to invest in India in 2021, starting with selling cars and then possibly looking at assembly and manufacturing, based on responses from the local market. 

Tesla's plan to tap the Indian market sparked discussion on Chinese social media platforms as to whether Tesla can replicate the success it has had in the Chinese market, considering some similarities such as a huge population.

Entering China in 2013, Tesla has achieved remarkable success in the past two years after building a production plant in Shanghai. It has so far launched two locally made models in China, the Model 3 and Y. Both were welcomed by local customers and lifted the country's appetite for electric cars in general. 

However, Chinese experts downplayed Tesla's moves in India, saying it won't be able to copy its successes in China because the market in India is very different. The consumption models are different, and India can't provide the infrastructure and logistics facilities that China can.

"India's car market, with annual sales of two or three million units, is only one-tenth that of China's. Also, low-budget cars are the norm, instead of higher-end models like Tesla's," Zeng Zhiling, an analyst at Shanghai-based consultancy LMC Automotives, told the Global Times on Thursday. 

He said Tesla has revealed plans to roll out budget models, possibly named Model 1 and Model 2, and that tactic might give Tesla a shot at the Indian market, but "not now". 

Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University, said that Tesla definitely has an eye on populous emerging markets such as India, but at the moment, Tesla is just testing the waters in India.

"There is no doubt that India offers huge potential for Tesla, but nothing more than that now. We are seeing Tesla doing this tiny, experimental program," he told the Global Times. "So Tesla is bullish on India, but China takes priority." 

The situation has worsened as the COVID-19 pandemic crippled the Indian economy, decimated local consumption power and grounded necessary reforms, Qian said.

India's ambition to be a viable substitute for China suffered a setback in December, after hundreds of Indian workers smashed and looted a Wistron Corp plant, a supplier of Apple Inc, causing reported damage of $7.1 million in total.


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