It is almost impossible to separate the government from tech advancement. This is because any new tech that is to enter the market must go through government approvals. This is what Tesla is currently facing in the Indian region. Tesla has been in touch with the Indian government over its plan to build a local factory in India. According to Tesla, when the project is ready, it will produce cheap electric cars for local sales and exports. Inside EVs reports that the cheapest Tesla car at the moment is the Model 3 Rear-Wheel Drive. The starting price of this car at the moment is $42,990. However, Reuters reports that when the Indian factory is ready, Tesla will produce cars worth $24,000. Nevertheless, the Indian government has its request.
It told Tesla that if it must produce such cars in India, then it must follow apple's example. This came after Tesla revealed that it wants its Chinese partners to supply relevant parts for the cars. However, the Indian government's request is that any Chinese supplier must partner with an Indian brand. This is how Apple does it and the government wants it to remain that way.
India has no local supplier of electric cars parts
If Tesla aims to build a factory in India and produce cheap electric cars, Chinese brands of EV parts could play a vital role. India lacks local suppliers for major parts like batteries. Even India's leading electric car brand, Tata Motors, imports batteries from China.
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According to three Indian officials who were present at the meeting, Tesla executives expressed their desire for certain suppliers from China to build a local base in India. The aim of this is to ensure that the supply chain is smooth and there is no need to import. However, Indian officials said Tesla can take a cue from Apple and allow Chinese brands to team up with local brands in India. This would enable Tesla's Chinese brands to enter the Indian market by forming joint ventures with Indian brands.
Apple currently has a fast – growing local supply chain in India with the likes of Foxconn, which assembles iPhones. Reuters claims a source said India is approving a joint venture of brands between Chinese and Indian brands. The source claims that the government is dealing with the request case by case and it has been on it in recent months. Another source with direct knowledge of Tesla's talks in India said Tesla was looking for a supply chain partner for the Indian factory. An Indian official said that for Tesla, a joint venture between a local company and a Chinese brand is feasible.
“Tesla has been asking for a separate ecosystem for their suppliers…if there is a local Indian joint venture partner, it can be approved on a case-by-case basis,” the Indian official said.
By taking a cue from Apple and linking with local Indian brands, Tesla can make a way in India and succeed. Nikkei Asia reports that India is a large and growing market for electric cars, and Tesla's entry into the market could help to boost the use of electric cars in the country. Reuters stated that if Tesla partner with local brands in India, it could reduce costs and boost efficiency. This could help company to offer decent pricing for its cars in India.
India has asked Tesla to follow Apple's example in finding local firms to partner with on any plan to build a supply chain plant in India. In addition to lower costs, the deal with local brands will give Tesla an easier access to local markets. This is what Apple has been doing in India and it has been working for the company.