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Tesla gains from China’s loss in India
PHOTO: PIB
REUTERS, New Delhi
China’s loss in India could be Elon Musk’s gain.
Tesla has had a red-carpet welcome from India for its proposal to invest in the country, while its largest rival in electric vehicles, China’s BYD, has been stopped cold by increased scrutiny from New Delhi.
The result could be an opening for Tesla to negotiate terms for an entry to the world’s third-largest auto market without the competitive threat from BYD that it faces in other emerging markets, like Thailand.
“The future of who wins in India will have some bearing on who wins globally in the EV race,” said Jasmeet Khurana of the World Economic Forum.
Since a meeting between Musk and Indian Prime Minister Narendra Modi in June in New York, Tesla has fast-tracked closed-door discussions with Indian officials on a potential plant investment and plans to build a new low-cost $24,000 EV.
Those talks continued over the past week with Tesla discussing minute details of its plans to gain access to India’s fast-growing EV market, and Modi personally tracking developments, sources say.
Those meetings, though, have been strictly kept under wraps, with officials putting out no photos on social media of handshakes with executives which otherwise is a usual affair after high-profile meetings.
BYD, meanwhile, appears to be taking a backseat. Months after seeking clearance for its own $1 billion investment in India, BYD is no longer keen to pursue the approval, Reuters reported. In a further setback, BYD is facing an investigation over allegations that its underpaid import tax in India.
Among other concerns, Indian officials are worried about the national security implications of Chinese-made vehicles and the data they could collect. India is “uncomfortable with Chinese automakers,” an official said.
While all investments from China have faced tightened approval requirements in India since a border clash between the two in 2020, there could be an outsized effect on the developing market for EVs in India because of China’s dominance in battery materials, battery production and other technology.
Tesla, too, has Chinese suppliers that have helped it slash production costs at its Shanghai factory and it now wants to bring them to India - where it appears to have an upper hand in talks with New Delhi.
India has told Tesla it will allow its Chinese suppliers into the country if they forge partnerships with local firms, just like Apple did. But at the same time, India is hesitant on BYD’s $1-billion plan even though that too was proposed as a partnership with a domestic engineering firm.
The Global Times, a Chinese state-run newspaper, said the reported pushback on BYD’s investment plan “will lead to a chain reaction and deal a blow to the overall confidence of Chinese companies in investing India.”
BYD did not respond to requests for comment on the status of its India investment plan or the import tax claim. In a statement to Reuters, the company noted it had been active in the Indian market for 16 years and sells commercial vehicles and passenger cars there.
Tesla did not respond to a request for comment on its talks with Indian officials. Musk had said in June that Modi was “pushing us to make significant investments in India, which is something we intend to do.”