Elon Musk’s Tesla had reduced prices in several of its major markets, including China and Germany.
Tesla CEO Elon Musk has delayed his trip to India, citing ‘’very heavy Tesla obligations’’. Musk was scheduled to meet Prime Minister Narendra Modi during his India visit. But this is not the first time that Elon Musk visit in India is canceled, since last 10 years country is waiting for his investment in India.
The Tesla founder has been delaying his visits to India. What factors are impacting SpaceX founder’s sudden interest in India? Is it grabbing an economic opportunity in the world’s future biggest Electric vehicles market or for survival under current competition globally? Does India need Musk More now or Elon needs India more?
Let us see what can be the possible factors impacting Tesla’s decision to invest in India
Tesla Electric Cars Sales Fall: Companies worldwide sales had fallen sharply from January through March as competition increased worldwide, & earlier price cuts also failed to bring more buyers.They sold only three lakh 90 thousand cars during this period which is 10 percent less than last quarter.
Tesla cut the US prices: Company cut prices of Model Y, Model X and Model S vehicles by USD 2,000 each this week, after the first-quarter deliveries sales fell.
Tesla Layoffs: Announced that it is laying off more than 10% of its global workforce, almost 14,000 roles due to slowing demand and pressure on prices.
Tesla Market value: Tesla’s market value was $120,000 crore, which fell within 10-12 months, up to $55,000 crores.
Tesla Shares: Company’s shares fell nearly 30 percent, and many including Wall Street’s biggest bankers raised cautious about Tesla.
The company cited production problems such as attacks on shipping in the Red Sea and an arson attack on its factory in Berlin.
Elon Musk Tesla’s Competition With China’s Electric Vehicles
Earlier Tesla had reduced prices in several of its major markets, including China and Germany. However, the cheapest Tesla (Model Y), is available at Rs. 52 lakh. Whereas China’s electric vehicle ‘BYD’ cheapest car comes in Rs 29-30 lakh. Elon Musk has started facing huge competition over price range across the world especially from Chinese cheaper electric cars.
China’s You Turn On Promises To Elon Musk
China attracted Elon Musk in all the possible ways to set up an electric manufacturing factory. Tesla was allowed to set up its mega Shanghai factory without the mandatory Chinese joint-venture which foreign carmakers need to fulfill.
But now, according to data from China Merchants Bank International Securities as quoted by The Economist, Tesla’s share might have reduced 14%, from 16% in the last quarter, as Chinese buyers switched to their countries brands like BYD, Li Auto, XPENG and Nio Motors.
According to the reports, Tesla was asked to sign a pledge on July 6 with Chinese carmakers and stop its price war with local carmakers and compete “fairly” in line with “core socialist values”.
This you turn from China is the red signal for Tesla. As many Chinese companies are entering into the market with their electric vehicles, Tesla needs to expand its market in various ways and also need to find a better place in the world to set up a factory. Here’s where India comes in the picture.
Why Elon Musk’s Tesla Want To Invest In India?
Currently, Tesla needs to find a low cost production hub and a market for an Electric cars with lower production costs, so Tesla can make electric cars available at cheaper rates. India is the country which can provide all the possible options for Elon Musk’s new experiments, which might have made the Tesla founder more interested in the country.