Indian auto rivals shade Tesla

Indian auto rivals shade Tesla

Companies that will rival Tesla if it eventually enters the Indian market are already shading the Austin, Texas-based car company before it has even committed to entering the country as a domestic competitor.

For the past two years, we have followed Tesla’s plans to enter India. The automaker and the government of India have been negotiating the terms of an entry for some time, which has been tumultuous, to say the least.

Tesla has been interested in building a domestic manufacturing plant in India but wanted to first test demand for its vehicles by importing them from another plant, likely Gigafactory Shanghai in China.

Indian government officials were not enthusiastic about the idea. Instead, they wanted Tesla to commit to building a multi-billion dollar facility that would churn out the company’s all-electric vehicles, a business decision that was obviously not favorable for Tesla. Negotiations were put on ice until this year.

Now that Tesla is moving forward with more intense plans to build a factory in India, it seems that companies based in the country are beginning to scour their potential competition.

Mahindra Group is one of India’s best-selling car companies, and the automaker’s CEO and managing director Anish Shah is already anticipating that Tesla will enter the Indian market soon.

However, he is not convinced that his company should be intimidated by the entrance of a giant with the reputation, valuation, or technology that Tesla has.

Shah said (via Street Signs Asia):

“We’ve seen tremendous competition in India over the last 20 years. So Tesla or anyone else coming in does not faze us. At one point, Mahindra was written off when all the global majors were coming into India. Today, we continue to have the number one market share in SUVs from a revenue standpoint.”

Mahindra has a strong business, with “close to a 50% market share in the light commercial vehicle segment,” Shah said. It has a $9.8 billion valuation, and by 2027, it expects between 20 and 30 percent of its SUV sales to be electric.

Perhaps the biggest question mark for Tesla before entering India is the demand for its vehicles. India is flooded with cheap and affordable options that would undercut the cost of a Tesla by tens of thousands of dollars.

However, Tesla is reportedly planning to build a factory that would produce a $24,000 vehicle, helping the company bolster an instantaneously competitive option right out of the gate.

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