India is now included in plans for the rollout of the Tesla Model 3 and they’ll be getting a Supercharger Network as well. Tesla Motors Inc recently unveiled its highly anticipated Model 3 five-seater electric sedan, the company’s most affordable electric vehicle (EV) to date. The launch generated much excitement all over the world, with several technology experts stating that the new vehicle could potentially be a game-changer in the automotive world. You can read about the specs and features of the car here and here.
The Tesla Model 3 created a tizzy in Indian business circles when CEO Elon Musk announced that the vehicle would be up for pre-order in seven more countries (Note: Tesla did not introduce the Model S or Model X in India).
Adding several more countries to Model 3 order page tonight. Check for details, but will include India, Brazil, SA, SK, NZ, Sing & Ireland.
— Elon Musk (@elonmusk) March 31, 2016
Several Indian startup bigwigs and industrialists have already made the booking payment of USD $1,000 for the Model 3. But the question needs to be asked- will the Model 3 eventually be a success in India?
Here is the breakdown of the entire scenario, taking pricing and other factors into account:
Price of the Tesla Model 3 will depend whether it is a CBU or CKD
This is the most crucial question regarding the new EV. According to a Reddit user, the approximate cost of the Tesla Model 3 in India will be around INR7mn or USD $105,000. That sounds unbelievably high when compared with the USD $35,000 (INR2.3mn) price that is being offered by the company. How is that even possible, you may ask?
Well, the calculation is actually based on the assumption that the Tesla Model 3 will be a Completely Built Unit (CBU) import. But if it is a Completely Knocked Down (CKD) unit, then the import costs will drastically reduced. Going down the CKD route is not so easy, but if you consider the intrinsic design of Tesla cars, which have very few components to break down, it may well turn out to be a viable option.
This is lucidly explained in a series of tweets by Twitter user @ku1deep below:
2/ there are a lot of people saying that India is a huge market but the tesla might cost too much and won't sell.
— Kuldeep (@ku1deep) April 1, 2016
4/ But forget luxury cars, Tesla can go after the D2 Segment as well. numbers again from https://t.co/CiXYCpHC25 pic.twitter.com/utlIdxaylv
— Kuldeep (@ku1deep) April 1, 2016
6/ Cars imported in Complete knockdown kit attract lower BCD ~20% for electric cars this is ~10%. Then you assemble them in India and sell.
— Kuldeep (@ku1deep) April 1, 2016
8/ Tesla would have to build a service network in India in any case IMO it makes sense to assemble the cars here as well.
— Kuldeep (@ku1deep) April 1, 2016
10/ With range of 350km per charge and the super low maintenance, this is a perfect car for India add the intense buyer lust and perfection.
— Kuldeep (@ku1deep) April 1, 2016
This is what Sugato Sen, deputy director-general of the Society of Indian Automobile Manufacturers, had to say about the Model 3 pricing: ‘While the price of a Model 3, the cheapest Tesla yet, starts at $35,000, import duties as they stand now will make it much more expensive. If the electric car is imported into India in one piece and costs over $40,000, the import duty will be 100%. Below $40,000, the import duty will be 60%. If it is a completely-knocked-down unit that will be assembled here, it will be taxed at 10%.’
Is this all fluff on Tesla’s part or are they really serious?
Pricing and features apart, is Tesla seriously considering India as a potential market or this is all just some grand expansion plan without any follow up investments? Well, Elon Musk certainly sounds serious. In 2015, he had mentioned setting up a Gigafactory (the company’s battery plant) in India. Musk also met Indian Prime Minister Narendra Modi around that time and was invited to be a part of India’s plan to become a renewable energy hub. Moreover, Musk has specifically stated that India will be getting a nationwide supercharger network, which is the most important part for Tesla to ensure that its EVs become popular in the country
@IndiaToday Will include India-wide Supercharger network
— Elon Musk (@elonmusk) April 1, 2016
Now, if Tesla really plans to sell the Model 3 in heavy numbers in India and also set up a supercharger network, a CBU model does not make any sense. The EV automaker is likely to take the CKD route like other luxury car companies.
According to the prebook confirmation email from Tesla, ‘North American deliveries will be first, followed by Europe, Asia and Pacific countries then countries with right-hand drive configurations.’ This means India will be among the last to get the Model 3, with deliveries expected to start around 2020. This also gives enough time for Tesla to set up its supercharger network in the country
Tesla’s plans are aligned with India’s EV objectives
In March, Indian Power Minister Piyush Goyal declared the government’s objective to make India a 100% e-vehicle nation by 2030. The governments of Delhi and Karnataka have already scrapped local taxes on EVs with the aim of making them more affordable and accessible. Further, the central government plans to boost EV sales in the country by offering subsidies under the National Electric Mobility Mission plan. Thus, Tesla Motors Inc’s plans are in line with the country’s EV objectives and are likely to receive widespread popularity over time.
There’s always the cancellation option!
Yes. All Tesla Model 3 pre-orders are totally refundable right up to the official launch.
Hey guys. You know all 200,000 of those tesla model 3 preorders are refundable all the way up to launch right
— BEWARE: Ed Zitron (@edzitron) April 2, 2016
So whether you are in India or any other country mentioned in the Tesla pre-order list, booking a Model 3 may well turn out to be a very good decision indeed!
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