logo
Why Tesla's ride into India's EV market won't be a smooth one

Why Tesla's ride into India's EV market won't be a smooth one

India Today2 days ago
Tesla has finally made its entry into the Indian market, opening its first showroom at Maker Maxity Mall in Mumbai's Bandra Kurla Complex (BKC) on July 15.But even as the global electric vehicle (EV) giant begins its journey in the world's third-largest auto market, experts warn that the road ahead will be anything but easy.The entry comes at a time when Tesla is facing its biggest drop in global sales to date. Its domestic sales in the US fell 6.3% in the second quarter of 2025, the third straight quarterly decline.Sales in China dropped nearly 12% in the same period. In Europe, Tesla has seen a steady five-month fall in deliveries, partly due to political backlash and rising competition from cheaper Chinese EVs. In fact, Tesla's market share in Europe slipped to 1.2% in May, down from 1.8% a year earlier.Nearly 50% of Tesla's revenue comes from the US, while over 20% is from China. The remaining 30% is spread across other global markets. With shrinking numbers in its top markets, India now holds fresh promise, but also serious challenges.WHAT IS TESLA OFFERING IN INDIA?Tesla has introduced the Model Y in India, priced at Rs 60 lakh for the rear-wheel drive variant and Rs 68 lakh for the long-range version. These models are being sold as completely built units (CBUs), which means they attract heavy import duties, adding to the cost.In comparison, the same Model Y starts at $44,990 (around Rs 38 lakh) in the US, 263,500 yuan (around Rs 30 lakh) in China, and 45,970 euros (around Rs 41 lakh) in Germany.This pricing puts Tesla in competition with luxury EV models such as the Mercedes-Benz EQB, BMW iX1, Volvo EC40, and Kia EV6 in India.TESLA'S STRUGGLE AGAINST HOMEGROWN COMPETITIONJahol Prajapati, research analyst at SAMCO Securities, believes the Indian EV market is already fiercely competitive.'Tesla's arrival in India has electrified the market, both in terms of buzz and intent. The brand is global royalty. Its design is flawless. Its tech, unmatched. And yet, here's the truth most people won't tell you: this won't be an easy ride for Tesla in India,' he said.While Tesla's name may carry global appeal, Prajapati pointed out that the company's offering lacks the price-to-performance advantage many Indian buyers seek.
Source: SAMCO Securities
'The Tesla Model Y is priced close to Rs 60 lakh. In contrast, Mahindra, Tata, and BYD are fielding EVs in the Rs 19–30 lakh range, offering nearly equal, sometimes greater, value on range and performance. Mahindra's BE 6 delivers 557 km, BYD eMAX7 offers 530 km, and Tata Harrier EV and XEV 9e are not far behind. Tesla offers 500 km.'STRUCTURAL CHALLENGES MAY HURT GROWTHAnother major hurdle for Tesla is the lack of local manufacturing. Without setting up a factory in India, the company is unlikely to lower prices or become more competitive in the mass market segment. 'India is not a market that falls for logos. It's a market that worships value for money,' said Prajapati.He also flagged the slow rollout of EV charging infrastructure, which could restrict Tesla's growth. While the ecosystem is improving, it is still not developed enough to fully support Tesla's premium offerings.'Homegrown brands like Tata Motors, Mahindra & Mahindra, and BYD India aren't just selling EVs, they're building ecosystems. These firms have already established service networks, trust, and a deep understanding of price-sensitive Indian customers,' he added.INVESTOR OUTLOOK STILL POSITIVE FOR INDIAN BRANDSPrajapati stressed that investors in Indian EV stocks need not panic.'Tesla is a powerful brand, but it doesn't mean it will take over the market overnight. The entry of a big global player like Tesla will only push more innovation and investment into the space. This is a moment of opportunity for Indian firms," he said.Prajapati said that the Indian EV story would be led by affordability, ease of access, and strong after-sales service—areas where Tata and Mahindra have already built strong foundations.SUCCESS IN INDIA ISN'T EASYJSW Group chairman Sajjan Jindal also shared a similar view earlier this year.Speaking at an event in March, Jindal said Tesla and CEO Elon Musk would face tough competition from Indian carmakers. 'He can't be successful in India! We Indians are here. He cannot produce what Mahindra can do, what Tata can do,' he remarked.While he acknowledged Musk's global achievements, Jindal said India is a complex market where global success does not guarantee local growth. 'To be successful in India is not an easy job,' he said.- EndsTune InMust Watch
advertisement
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

India-UK FTA to boost bilateral trade for pharma, medtech, say industry bodies
India-UK FTA to boost bilateral trade for pharma, medtech, say industry bodies

Mint

time26 minutes ago

  • Mint

India-UK FTA to boost bilateral trade for pharma, medtech, say industry bodies

The India-UK free trade agreement, signed on Thursday, is expected to open up new opportunities for Indian pharmaceutical and medical device makers. The deal is also expected to improve access to medical devices from the UK in India. Medical device manufacturers anticipate an increase in trade between the two countries but are awaiting clarity on non-tariff measures and on whether regulatory processes will be streamlined. 'Previously, medical devices imported into the UK were duty-free, so tariff restrictions were not an issue but regulatory approval costs and time were a challenge,' said Rajiv Nath, forum coordinator of industry body Association of Indian Medical Device Industry (Aimed). The body had previously sought recognition of regulatory approvals from the CDSCO or the Quality Council of India's voluntary Indian Certification for medical devices to fast-track approvals by the UK's Medicines and Healthcare products Regulatory Agency (MHRA). 'We look forward to an update on this,' said Nath. However, medtech manufacturers are also seeking strict monitoring of imports to India, to prevent other countries rerouting products into India through the UK. Mint had previously reported that domestic manufacturers raised concerns over the possibility of Chinese-origin products being routed through the UK to exploit the zero-tariff provisions under the FTA. India levies about 7.5% import duties on medical devices from the UK, which are expected to come down in a phased manner after the deal, Nath said. In 2024, medical device exports to the UK increased by 13% year-on-year to ₹ 1,015 crore, while imports from the UK rose 36% to ₹ 2,295 crore, according to Exim data. 'It not only strengthens trade ties but also opens new avenues for advanced technology collaborations between Indian and UK companies,' Himanshu Baid, managing director of Poly Medicure Ltd, said in a statement. 'With India exporting medical devices worth approximately $115 million to the UK, one of our top 10 export destinations, this agreement is poised to further boost our presence,' he added. The trade deal is also expected to open up the market for India's generic drugmakers. 'As per the indications, the pharma sector will have opportunities to supply affordable and quality assured medicine contributing to better patient care in the UK,' said Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance (IPA). 'We are awaiting further details to identify specific areas where these opportunities can be effectively leveraged,' he added. Generic players like Lupin, Biocon, Dr. Reddy's Laboratories and Wockhardt, which have exposure to the UK market, could stand to benefit.

UK, India say no room for double standards on terrorism in Modi–Starmer talks
UK, India say no room for double standards on terrorism in Modi–Starmer talks

New Indian Express

time27 minutes ago

  • New Indian Express

UK, India say no room for double standards on terrorism in Modi–Starmer talks

NEW DELHI: India and the United Kingdom on Thursday sent a strong, united message against terrorism, with both Prime Minister Narendra Modi and his British counterpart Keir Starmer agreeing that there can be no double standards in tackling extremism. Following a bilateral meeting at the Chequers Estate, Modi thanked Starmer for the UK's strong condemnation of the April terrorist attack in Pahalgam, Jammu and Kashmir, which claimed 26 lives. 'We are united in our view that there can be no place for double standards in the fight against terrorism,' Modi said. 'We also agree that forces with extremist ideologies must not be allowed to misuse democratic freedoms. Those who misuse democratic freedoms to undermine democracy itself must be held to account.' The statement, also seen as a veiled reference to pro-Khalistani activities abroad, comes amid growing Indian concern over threats to Indian diplomats and missions in the UK. Foreign Secretary Vikram Misri later said that India had raised the issue during the bilateral talks. Both sides reaffirmed their commitment to enhancing cooperation between their security agencies, including on the extradition of economic offenders, a longstanding demand from India involving several high-profile fugitives residing in the UK. The two leaders also discussed regional and global challenges. 'We exchanged views on peace and stability in the Indo-Pacific, the conflict in Ukraine, and the situation in West Asia,' Modi said. 'India supports the early restoration of peace and stresses that respect for the sovereignty and territorial integrity of all nations is essential. The demand of today's era is not expansionism, but developmentalism.' Modi also expressed condolences for British nationals who died in last month's Air India crash in Ahmedabad. The meeting, which included a private one-on-one between the leaders, also laid the foundation for a long-term bilateral agenda. A 'Vision 2035' roadmap is being drafted to energize the India–UK Comprehensive Strategic Partnership over the next decade, spanning trade, defence, clean energy, and technology cooperation.

Empowering smallholder farmers & marginal farmers through formation & promotion of FPOs
Empowering smallholder farmers & marginal farmers through formation & promotion of FPOs

Time of India

time27 minutes ago

  • Time of India

Empowering smallholder farmers & marginal farmers through formation & promotion of FPOs

Dr. Prashant Prabhakar Deshpande has post-graduated in Economics with a Gold Medal in 1976 and was awarded a Ph.D in Social Sciences from Nagpur University in 2007. Introduction The Central Sector Scheme for Formation and Promotion of 10,000 Farmer Producer Organisations (FPOs) was launched by Prime Minister Narendra Modi on 29th of February, 2020. The scheme was launched with a budget outlay of Rs 6,865 crore till 2027-28. Since the launch of the scheme, Rs 254.4 crore in equity grants have been released to 4,761 FPOs and credit guarantee cover worth Rs 453 cr has been issued to 1,900 FPOs. Recently, FPOs were in the spotlight as India reached a transformative milestone by establishing 10,000 Farmer Producer Organisations (FPOs), ahead of the March 31, 2025, deadline, collectively bringing together nearly 30 lakh farmers across the country, 40% of whom are women. These FPOs are now conducting business worth thousands of crores of rupees, contributing immensely to the growth of the agricultural sector. On the occasion of the release of the 19th instalment of PM-KISAN in Bhagalpur, Bihar, the Prime Minister launched the 10,000th FPO, a milestone marking a significant leap in Farmer Welfare and inclusive agricultural development. The 10,000th FPO was registered in Khagaria district and focuses on maize, banana, and paddy. The concept behind the Farmer Producer Organisations Farmers who are the producers of agricultural products can form groups. To facilitate this process, the Small Farmers' Agribusiness Consortium (SFAC) was mandated by the department of agriculture and cooperation, ministry of agriculture, government of India, to support the state governments in the formation of FPOs. Objectives To provide a holistic and broad-based supportive ecosystem to form to facilitate the development of vibrant and sustainable income-oriented farming and overall socio-economic development and wellbeing of the agrarian communities. To enhance productivity through efficient, cost-effective, and sustainable resource use to realise higher returns through better liquidity and market linkages for their produce and become sustainable through collective action. To provide handholding and support to new FPOs up to five years from the year of their creation in all aspects of management of FPO, inputs, production, processing and value addition, market linkages, credit linkages, and use of technology etc. To provide effective capacity building to FPOs to develop agriculture entrepreneurship skills to become economically viable and self-sustaining beyond the period of support from the government. The Farmer Producer Organisations (FPOs) The FPOs are collectives formed by farmers to: Enhance productivity; Reduce costs, and; Improve market access through cooperation. The primary aim of an FPO is to enable farmers to benefit from the economies of scale, enhancing overall Farmer Welfare. The Small Farmers' Agribusiness Consortium (SFAC) under the Ministry of Agriculture plays a pivotal role in supporting the formation of the FPOs, which are registered under either: The Companies Act, or; The Co-operative Societies Act. Need for FPOs Small, marginal, and landless farmers face challenges during the agriculture production phase, such as: Access to technology; Quality seeds; Fertilisers and pesticides, and; Requisite finances. Challenges in marketing their produce due to a lack of economic strength. FPOs help in the collectivisation of such small, marginal, and landless farmers, giving them collective strength to deal with such issues. managing their activities together to get: Better access to technology; Inputs; Finance, and; Market for faster enhancement of their income. The way FPOs help Smallholder Farmers Achieving Economies of Scale FPOs help small and marginal farmers reduce input costs and secure better prices by aggregating purchases and sales. Enhanced Credit Access Access to institutional credit since long a barrier for smallholders, is improved through FPOs, aligning such support with ongoing government schemes for farmers aimed at financial inclusion. Accessing Global Markets FPOs enable smallholders to access international markets. Overcoming Shrinking Farm Sizes With average landholding size shrinking from 1.08 hectares in 2015–16 to just 0.74 hectares in 2021–22, FPOs help farmers aggregate resources and invest in modern equipment. This consolidation enables economies of scale: Allowing for bulk purchases; Shared services, and; Use of advanced machinery is improving productivity, a key enabler of agricultural sector growth. Supporting Value-Addition & Processing Through shared infrastructure like mini-mills and cold storage FPOs help farmers earn more by adding value to raw produce, strengthening Farmer Welfare through diversified income streams. Key Features of the Scheme Up to Rs 18 lakh financial aid over 3 years Matching equity grant of Rs 2,000 per farmer (max Rs 15 lakh) Credit Guarantee up to Rs 2 Crore in project loans Cluster-based handholding support for 5 years Challenges Faced by FPOs Many farmers joining FPOs have limited exposure to modern agricultural practices, quality standards, and market requirements. Most farmer-leaders lack formal training in business management, financial planning, human resources, and strategic planning. Most FPOs begin with minimal capital contributed by farmer members who themselves have limited financial resources, creating a precarious situation where the organisation struggles to invest in necessary infrastructure, working capital, or growth opportunities. Farmer members often expect immediate benefits from their FPO membership but are reluctant to make significant financial contributions. Traditional financial institutions often view these organisations as high-risk borrowers due to their agricultural focus, limited collateral, and perceived management weaknesses. Many FPOs lack the market intelligence necessary to make informed decisions about what to produce, when to sell, and at what prices, putting them at a disadvantage competing with established suppliers or negotiating with buyers. Epilogue By fostering collectivisation, enhancing market access, and providing financial and institutional support, the initiative has empowered millions of small and marginal farmers, including women and economically weaker sections, boosting agricultural productivity and income, contributing to rural job creation and economic resilience. As FPOs continue to evolve, they promise a more equitable and resilient future for India's agricultural landscape, it is opined. Critics however state that it is critical to move beyond numbers. They opine a target-oriented approach may work in the initial phase. As such, although reaching the target of 10,000 FPOs ahead of the March 31, 2025 deadline is commendable, there is now a need to focus on better outcomes. Facebook Twitter Linkedin Email Disclaimer Views expressed above are the author's own.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store