It has been confirmed that Tesla has now registered a subsidiary in India as a move to penetrate the region’s EV market.
The Registrar of Companies (RoC) filing verifies a new division called Tesla India Motors and Energy Private Limited was registered in Bengaluru, Karnataka as a subsidiary of a foreign entity. The new India-based Tesla offices will be located in the city’s business district in Lavelle Road with three new directors heading up the new branch namely, David Jon Feinstein, Vaibhav Taneja, and Venkatrangam Sreeram.
When news of Tesla’s entry to India was reported back in 2020, it was originally reported that the US car manufacturer would start with a research and development center however, India’s Road Transport and Highways minister, Nitin Gadkari added that Tesla will also be focusing on sales before expanding its operation to local manufacturing.
India has been committed to adopting green vehicle solutions and Tesla has selected a good time to take advantage of the opportunity. However, the California EV maker is not the only company to have identified the possibilities with India’s emerging EV market. Ola, Uber, and Vogo are just of the mobility startups that are looking to expand their EV fleet while Hero, Mahindra, and Hyundai are pushing ahead to get a place as key players in the area.
Tesla CEO, Elon Musk who is now officially the richest man in the world has gained a celebrity status in India, which is promoting the Tesla name and the demand for its products in the Asian region. Tesla’s market value, share price, and innovative technologies are making the brand an aspirational one so to have an established branch setup in Bengaluru is going to be a significant game changer that will help Tesla get its foot in the door.
Additionally, the US company’s commitment to invest in India is going to set the wheels in motion for other manufacturers and component suppliers to follow suit and enter the market.
Tesla is also increasing its activity in other areas of Asia. The company recently went talent searching in China to establish a design team that can develop electric vehicles according to the local consumer requirements. While Tesla works to increase its presence in China, it will face strong competition from Nio, the growing Chinese EV manufacturer. Nio is in a good position to capture a large portion of the market.
Nio has already released its first EV sedan this year, the et7. It comes in at a starting price of $69,000 and has a 70 kilowatt-per-hour battery pack. Nio is in a strong position in the SUV category but moving into the sedan market is going to compete heavily with the Tesla Model S.
India and China both offer huge potential to any EV manufacturer who offer the best products to the local markets. China however has the largest vehicle market and wants to set itself as a leader in EV technology. Beijing has actively pursued this ambition by offering the EV industry subsidies, implementing less restrictions and ensuring the availability of large charging infrastructures.
While homegrown and foreign EV manufacturers work to position themselves against Tesla, it is still the global leader in the EV space. The US carmaker had a successful 2020 in meeting delivery targets, entering the S&P 500 index, and having a record high share price.
However, this week Tesla saw a 2.1% drop in its share price, which is the first decrease we’ve seen over the past year. But with the steps Tesla is taking to move into India and further improve its offering to the Chinese market while operating a Giga Factory in Shanghai, it will continue to have the competitive advantage for the foreseeable future.