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