Tesla, BYD, Other Automakers See Promise in India’s NEV Market
Earlier this month, Chinese automotive firm BYD announced that it would launch its first pure electric passenger car model, the ATTO 3, in India, adding another overseas market following recent releases in Europe and Southeast Asia. In addition, other car companies such as Germany’s Mercedes-Benz and Volkswagen, as well as Japan’s Suzuki, are increasingly eyeing India’s new energy vehicle market.
SEE ALSO: BYD Considers Second Factory in India
In fact, some car companies have already attempted to act as pioneers in India. As early as 2016, Tesla CEO Elon Musk made a plan to enter the country’s NEV market, saying that it was very likely that Tesla products would be sold there in 2019. South Korean auto brand Hyundai Motor also entered the Indian market in 2019.
India has now become the fourth-largest automotive market in the world after China, the US and Japan. By 2025, the country will surpass Japan to become the third-largest automobile market globally.
The Indian Ministry of Power pointed out in an outlook report that by 2030, 40% of newly-sold vehicles in India will be pure electric models. By 2047, independent India’s centenary, the proportion will reach 100%. In order to achieve this goal, the country’s government introduced a policy named “Faster Adoption and Manufacturing of Electric Vehicles (FAME)” in 2015, subsidizing the purchase of hybrid energy vehicles or NEVs that meet policy requirements.
From Mercedes-Benz and Volkswagen to Suzuki and BYD, these car companies have flocked to India’s NEV market this year, all harboring different grand plans for this vast market. But for these car companies, their road ahead will not not smooth.
First of all, automotive firms face high tariffs. From a selling price point of view, if BYD’s ATTO 3 is sold for about 200,000 yuan ($27,779), the tariff will be 60%. Mercedes-Benz’s EQS580 4MATIC, which is determined to sell for more than 1 million yuan, will face the same 100% tariff as Tesla if it is sold in India. Even after overcoming the tariffs, they will face fierce competition from local car leaders such as Tata Motors.
Secondly, there is a quite major shortage of charging facilities for electric vehicles in India. According to public data, as of March 25 this year, a total of 1,742 public charging stations are operational. Meanwhile, as of September 2022, the cumulative number of charging spots in China was 4.488 million units. The shortage of infrastructure will inevitably hinder local consumers in India from choosing NEVs for their daily travel, thus hampering the domestic development of the industry.
In a nutshell, BYD, Volkswagen, Mercedes-Benz and other car companies are now seeking firm footing in the Indian NEV market and there are many challenges to be solved. It is certain that many more car companies will covet this market in the future, indicating that the battle will continue.