A few months back, Tesla, Inc. got into talks with Shanghai municipal government to set up an electric car factory in China. It is now reported that Tesla, Inc. Tesla has reached an agreement with Shanghai authorities. The agreement will make Tesla the first foreign automaker to build a wholly owned factory in the city’s free-trade zone. Until now, foreign auto makers have built cars in China through joint ventures with local manufacturers which forced them to split profits, but this deal may change the dynamics.
While the deal will boost the already fast-moving electric vehicle of China, it will haunt India for years as a good opportunity which is lost. On multiple occasions, Tesla has shown interest in setting up its first manufacturing plant outside the US in India. Even the company’s CEO Elon Musk had tweeted that they were looking to launch their cars in India and after PM Modi’s visit to the Tesla factory in the US in 2015.
@IndiaToday Will include India-wide Supercharger network
— Elon Musk (@elonmusk) April 1, 2016
India commits to sell only electric cars by 2030. It is already the largest market for solar power. https://t.co/EGBNTPzmE5
— Elon Musk (@elonmusk) June 1, 2017
When Nitin Gadkari, Minister of Road Transport, Highways visited the Tesla factory in the US, he proposed to the Tesla senior executives to make India their Asia manufacturing hub and offered land near major Indian ports to facilitate export of their vehicles to South and South East Asian countries.
Tesla’s plans to set up its manufacturing unit in India seemed to have hit a roadblock over issues surrounding the local sourcing norms.
Maybe I’m misinformed, but I was told that 30% of parts must be locally sourced and the supply doesn’t yet exist in India to support that.
— Elon Musk (@elonmusk) May 22, 2017
In discussions with the government of India requesting temporary relief on import penalties/restrictions until a local factory is built
— Elon Musk (@elonmusk) June 14, 2017
In discussions with national govt. Just need a temporary reprieve on local content requirements until we can build a factory in India.
— Elon Musk (@elonmusk) September 16, 2017
The Indian dream of becoming an electric vehicle manufacturing giant is not so rosy on the ground level. There is a massive push from the government, but the present charging infrastructure and support systems are posing as roadblocks. As a result of which, not many electric vehicles can be seen on the roads. Even the tenders released on Electric Vehicles lack clarity and consistency.
If the Indian Government wants to use EV market growth as an opportunity to turn India into a manufacturing hub, it needs to move fast.