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Analysis: Tesla not coming to India any time soon

There has been a steady buzz over the past few years regarding the much awaited entry of Tesla into India. After all, Tesla is regarded as the poster boy of the Electric Vehicle (EV) generation and has brought the limelight on electric cars. The fact that electric cars became popular and made other manufacturers to get in this space is very much to the credit of Tesla.

Tesla coming to India

India has been waiting to get a slice of the Tesla action for a long time now. A few years back rumour mills were abuzz after the Tesla senior management visited the country.

Also in 2015, Prime Minister Narendra Modi visited the Tesla headquarters at Palo Alto, California along with Elon Musk tweeting about India being on the radar as a potential market. This stoked the rumour mills even more. Along with Elon Musk, Tesla's CFO of Indian origin, Deepak Ahuja, was one the key figures behind the decision of Tesla coming to India.

Ahuja has been one of the key people for Tesla and its success. Previously, an executive with Ford, he was the first CFO at Tesla. Ahuja did visit India and was the man who Elon Musk entrusted with figuring out Tesla's India launch. However his exit earlier this year from this position put a dent in Tesla’s India plans.

Ex Tesla CFO Deepak Ahuja

If and when Tesla launches in India, it would be with the Model 3, but ironically it is this car that has also derailed Tesla's plans for India. The Model 3 has been touted as the car that will put Tesla on the mainstream and will make it a bigger force to be reckoned with.

While Model X and S are high priced luxury cars, the Model 3 is expected to open doors to newer markets. However, the going has not been smooth with meeting demand or production issues or costs increasing with Tesla as a result being on a rigorous cost cutting exercise. While climbing the ladder and being a bigger car-maker (and more importantly trying to be a profitable one), Tesla's India entry certainly does not look to be its main priority right now.

We do expect Tesla to eventually launch in India — around 2020 or later. It is also likely that Tesla will ship cars from its China plant to India.

Tesla’s factory in Shanghai, China would be making lower priced versions of the Model 3 for Asian markets including, possibly, RHD versions for India — something that fits into the company’s scheme of things. However, that is again not happening any time soon with Tesla embroiled with its own issues. Of course, the initial production of the plant would be kept for the local market with China being a vastly more important market than India, at least in terms of volumes.

So yes, Tesla will ‘eventually’ come to India, but don't hold your breath...