Source: Teslarati
In the face of the rapid development of the global electric vehicle giant, India has also begun to dig up China's "wall foot" and frantically show overtures to Tesla.
Recently, according to foreign media reports, India's Minister of Transport and Transport Nitin Gadkari said that if Tesla wants to have the Indian market, it must build factories in India, avoid selling "Made in China" in India, and export "Made in India" Tesla to the world.
Musk's "Indian dream" has long been envisioned, and in 2018, he said he hoped to enter the Indian market. But the mere sale of Tesla in India has made Musk feel a huge challenge from government regulations. It wasn't until September that Indian authorities announced that Tesla would be allowed to produce or import four models in India.
This time, in order to compete for Made in China, Gard Kari promised that the Indian government would guarantee Tesla all necessary support and that the cost of Tesla's manufacturing in India would be lower than that of China. "Whatever support we want, our government will respond to everything we need."
For Tesla, the biggest obstacle to entering India is undoubtedly the issue of tariffs. To protect its auto industry, India has imposed huge tariffs on imported cars. At present, the import tax rate for cars under $40,000 is 60%, and the tax rate for cars over $40,000 is 100%. This also means that the local government will charge 100% tariffs on the vast majority of Tesla models entering India.
Musk has previously publicly stated that if the Indian government can have a temporary tariff reduction, then Tesla is likely to build a factory in India. Now the Indian government, which proposes to let Tesla choose one or the other, also "keeps a hand", and it is necessary to determine that Tesla will build a factory in India before further opening up the market to it.
The temptation continues, can Tesla's "Indian Dream" come true?
<h1 class="pgc-h-arrow-right" data-track="8" > 1.37 million vs 5,000 vehicles</h1>
Whether Tesla will eventually choose India is unknown, but for Tesla at this stage, the need for expansion is indeed there.
According to Tesla's latest KPI, it plans to sell 20 million vehicles worldwide by 2030. At present, Tesla's five production sites around the world (Tilburg plant in the Netherlands, Fremont Vehicle Assembly Plant, Shanghai Gigafacty, Berlin Gigafactory and Austin Gigafactory) have a total planned annual production capacity of about 2.04 million units.
Tesla, which has entered the full-power production mode, wants to quickly achieve a ramp-up in production capacity, and the efficiency of factory construction has become particularly important.
In October, Musk made it clear at the annual shareholders' meeting at the Austin Gigafactory in Texas that Tesla has been looking for a new factory address and could make a final decision in 2023.
Source: AP
India undoubtedly wants to compete for this seat. Just what Tesla wants, can India give it?
Wei Cheng, who worked in the Lingang New Area, still remembers that at that time, the project of the Shanghai Super Factory had a green light, from land transfer, construction to completion and delivery, all completed within one year, "the same volume of projects just to build a house is afraid that it will take 3 years."
In addition, Tesla has also received real money and silver support from the Chinese government. In addition to land resources, according to a report it has submitted to the SEC, in 2019, the Shanghai government provided about $85 million (about 590 million yuan) of "subsidies" to Tesla's Shanghai factory. That same year, Tesla also received a low-interest loan of 18.5 billion yuan from a Chinese bank.
More critically, Chinese consumers have proved their support for Tesla with practical actions, and the domestic market has also given it unlimited imagination. Compared with the preferential policies that can be considered before building a factory, how much sales Can India bring to Tesla is also an account that the latter has to calculate.
According to the latest data released by the Association of Automobile Manufacturers, in September 2021, Tesla delivered 52,153 vehicles in the Chinese market, an increase of 27% month-on-month and 394% year-on-year.
In 2020, China's total automobile sales were 25.31 million units, of which 1.37 million were new energy vehicles. In contrast, of the 2.42 million new vehicles sold in India in the same year, only 5,905 were new energy vehicles. Master, an analyst at automotive industry consulting firm LMC Automotive, expects Tesla to only sell 50-100 Model 3s a year in India.
Compared with the above, Yang Honghai, who was in charge of SAIC MG's sales network in India, believes that the local auto industry level, which is "like China in the 80s and 90s", is the difficulty of Tesla building a factory in India.
Yang Honghai remembers that around 2018, when MG Motors first arrived in the Indian market, the first thing he felt was the "dimensionality reduction blow". At that time, smart cars were barely in the Indian market, and they exchanged car networking technology with local engineers, "they hadn't even heard of it." The final solution was to send Indian engineers to China first.
In addition, in Yang Honghai's view, compared with the old automobile industry base in Shanghai accumulated over decades, although the Indian labor force is relatively cheaper, it is "not cost-effective" considering the comprehensive labor efficiency and labor quality. Sometimes a group of workers are recruited, and after two days someone suddenly runs away, because of racial contradictions, "too many uncontrollable factors."
Tesla on the streets of India Source: Rushlane
More importantly, even if the Indian government removes tariffs, whether Tesla's price can be accepted by the market is still the key.
Yang Honghai said that in the Indian market, the hot models are mainly concentrated in about 70,000 or 80,000 yuan. "Kaiyue, Volkswagen, Audi are all boss-level people who can drive a car." Basudeb Banerjee, an automotive analyst at Ambit Securities, has said the average selling price of a passenger car in India is $7,000, about a third of the major developed markets.
However, The Credit Suisse report shows that in India, where there is a huge gap between rich and poor, the richest 10% own 76.3% of the national wealth. This may become a potential consumer of Tesla.
Yang Honghai remembers that when he inspected the location of the store in Mumbai, he saw a joint Porsche and Maserati store, "next to the bank, opposite the Tata headquarters building." Although the location is ideal, the other party is withdrawing the store, and the landlord explained to him that the store can only sell more than 300 cars a year.
According to FT reports, sales of high-end luxury cars in India are approaching an all-time high, with Mercedes-Benz's sales tripling year-on-year in the third quarter to only 4,101 units.
Obviously, the purchasing power of rich people alone will not allow Tesla to achieve scale effects. In Yang Honghai's view, "even if they only do their business and the infrastructure is not sound, Tesla can only become a toy car."
According to the Indian Electric Vehicle Manufacturers Association (SMEV), as of April 2021, about 1,300 charging stations have been established in India. In contrast, as of August this year, the number of charging piles in China has reached 2.1 million.
In China, electric vehicles can be driven all the way from Guangzhou to Beijing, while in India, "electric vehicles can only be driven in Mumbai city."
<h1 class="pgc-h-arrow-right" data-track="30" > say that eye red is true</h1>
If only in terms of quantity, as the world's fourth largest automotive market, India has been trying to promote electrification for the past few years.
In April 2015, India proposed the National Plan for Electric Mobility (FAME) to promote the development of new energy vehicle technology, build pilot projects and supporting infrastructure such as charging piles. In 2016, Piyush Goyal, then India's energy minister, also set a timetable for banning combustion: from 2030, only electric vehicles will be sold in India.
However, after 5 years, the goal of banning combustion is approaching day by day, and the share of electric vehicles in India's new car sales in 2020 is still only 0.2%, and the progress of electrification is almost negligible.
Source: World Bank
Tesla is undoubtedly its hope. Gardkari said the reason tesla was asked to produce in India was to "bring in its technology and expertise to help India build an electric vehicle ecosystem." ”
In the Chinese market, Tesla as a "catfish" has verified its energy. While sales and production are rising, it has also injected new nutrition into China's new energy automobile industry chain.
At the beginning of 2020, Tesla's localization rate was only 30%, and at the end of the year, Tesla's vice president of foreign affairs, Tao Lin, said, "Tesla's 100% localization rate target has basically been achieved." ”
"It's like China in the past, where markets are exchanged for technology." In Yang Honghai's view, if India successfully introduces Tesla factories, it will be able to drive more upstream and downstream enterprises in the industry to join and build a complete electric vehicle industry chain. This also coincides with the concept of "made in India" proposed by Indian Prime Minister Narendra Modi.
Perhaps another, more intuitive benefit is employment. Unemployment data released by the India Economic Monitoring Center shows that at the end of last year, India's unemployment rate rose to 9.06%. A gigafactory that can drive the upstream and downstream of the industry is bound to bring more jobs than an assembly plant.
Tesla has said it has created between 6,000 and 7,000 jobs for its gigafactory in Berlin and 5,000 new jobs in Austin, Texas, this year.
Yuan Meng, who was in charge of overseas business at SAIC-GM-Wuling, told Future Auto Daily that in addition to the introduction of technology, for the Indian government, the greater value of Tesla's factory is to "build a sound electric vehicle ecosystem." In addition, India's huge population base, "the size of the automobile market is destined not to be too small." ”
It's just that in his view, the time window for car companies to enter India is also very important. "There is no market when you enter too early, and there is fierce competition when you enter too late." This time, it depends on Musk's choice.
(At the request of the interviewee, some of the characters in the article are pseudonyms)
Author | Ding unique
Edit | Wang Yan