Tesla's Arrival in India: Igniting Growth and Innovation in the EV Market A recent research report by Counterpoint research, says India's EV sales in expected to increase by 66 per cent in 2024, and EVs market share in passenger vehicle segment will double to 4 per cent from 2 per cent in 2023.

The much anticipated entry of electric car maker Tesla is all set to happen in India with its chief Elon Musk's two-day visit to the country during which he will outline the investment plans in the electric vehicle sector of the country.

The US electric car manufacturer has been trying to enter this biggest market for quite some time now. However, the government, in its new electric vehicle policy, has offered strong incentives for the international players who are looking to tap the Indian market.

According to the new EV policy, the import duty has been reduced for the companies investing a minimum of USD 500 million in manufacturing units, allowing them to import up to 8,000 vehicles, costing USD 35,000 or more each, a year at a lower tax rate of 15 per cent, compared to the 70-100 per cent imposed on imported EVs.

According to a report, electric vehicles made up about 2 per cent of total car sales in 2023 but the government is aiming to increase this to 30 per cent by 2030.

Meanwhile, Musk's efforts in China have encountered hurdles despite his influential role in shaping the electric vehicle market. Although Tesla was enticed with incentives to establish a presence there, the emergence of formidable domestic competitors has disrupted its dominance.

Amid all this development in the ever evolving electric vehicle industry around the world, the question arises, how Tesla's entry will boost the domestic EV market of India?

According to Hari Kiran, Co-founder and COO of eBikeGo, the entry of global electric vehicle manufacturers like Tesla, will boost the value of the EV sector to about USD 100 billion per year.

Speaking to Entrepreneur, he said, "Tesla into the Indian EV market will boost the value of the EV sector to about USD 100 billion per year. Furthermore, it will result in technological advancement at a lower cost for Indian enterprises, facilitating competitive pricing and driving market growth."

Tesla's foray into the Indian electric vehicle (EV) market has the potential to revolutionise the sector and usher in a new era of sustainability and creativity.

Mukesh Kumar Bansal, CTO, TelioEV, EV Charging Management Solutions provider company said that by strategically concentrating on the development of charging infrastructure, Tesla hopes to significantly reduce a major barrier to the mainstream adoption of electric cars (EVs) and increase customer access to sustainable transportation options in India.

"India is poised to take the lead in the global electric vehicle revolution, opening the door to a more sustainable and promising future, with Tesla at the vanguard of this movement," he added.

Meanwhile, Amit Raj Singh, Founder and Managing Director, Gemopai said that Tesla's entry in the Indian EV market will be a game­changer.

"With renowned expertise in electric vehicles, cutting-edge technology, and brand appeal, it will reshape the Indian EV industry. Existing companies will also improve their offerings and invest more in R&D to stay competitive. Hence, this will also lead to more EV options for consumers, driving adoption and lowering prices through economies of scale," he added.

Rohan Shravan, Founder CEO, and CTO of Tresa Motors said, "With Tesla's expertise and commitment to sustainable mobility, coupled with supportive government policies, we anticipate a a surge in domestic production and innovation. This not only expands consumer choice but also accelerates infrastructure development and technological advancements, firmly establishing India as a global leader in the EV industry- something that is ingrained in Tresa's vision as a company."

Mayuresh Raut, Co-founder & Managing Partner, Seafund said that Tesla looking to enter the India market can have a similar impact to what Apple did when they finally decided to make India as one of their manufacturing destinations. Though these are high tech devices with different manufacturing and distribution complexities, the made in India iPhone has allowed India to leverage some of its earlier electronics manufacturing capability, but more importantly, opened doors to some of the most cutting edge manufacturing for sensors, camera modules and supply chain.

"The expectation is that Tesla will propel a similar maturing of our supplier ecosystem and have a virtuous effect on setting a benchmark for world class EV manufacturing in India that brings together suppliers, advanced robotics and skilled technicians," he added.

With Tesla entering the Indian market, it's set to make a significant impact. As an aspirational brand, Tesla doesn't just introduce a product; they bring an entire ecosystem. This is crucial for the EV industry, where quality products and a robust supply chain are essential, Madhumita Agrawal, Founder & CEO, Oben Electric said.

"Tesla's presence will elevate standards and also foster growth across the entire EV ecosystem in India," Agarwal added.

If we talk about four-wheeler in the market, Tata Motors holds over two-third of the country's EV market. However, Mahindra & Mahindra and BYD are emerging players in the evolving market.

Recording a 2476 per cent increase with just one model in its portfolio, Mahindra & Mahindra was the fastest-growing brand in 2023, followed by Build Your Dreams (BYD) and MG Motors.

A recent research report by Counterpoint research, says India's EV sales in expected to increase by 66 per cent in 2024, and EVs market share in passenger vehicle segment will double to 4 per cent from 2 per cent in 2023. The report also says by 2030, EVs are expected to constitute nearly one third of India's total PV sales.