Global electric vehicle manufacturers, such as BYD and Tesla, are redirecting their attention to India, expecting significant growth in its emerging electric vehicle market. They are implementing a premium strategy by introducing high-end models priced between ₹25-55 lakh, seeking to gain market share during a global downturn in more established markets like China and Europe.
As the growth of established electric vehicle (EV) markets begins to decelerate, major global players are shifting their focus to India, a market that is still in its nascent phase. To seize this opportunity, manufacturers are embracing a premium strategy and increasing their involvement in the assembly of completely knocked down (CKD) vehicles.
Elon Musk, the CEO of Tesla, has been attempting to penetrate the Indian automobile market for some time, facing significant trade obstacles along the way.
Currently, Musk is in a position of influence within the U.S. government as an advisor to President Trump, indications suggest that Tesla is gearing up to launch electric vehicle sales in India.
For nearly ten years, Tesla has held the title of the largest electric vehicle manufacturer globally, with its premium cars becoming the most common electric vehicles on the streets.
However, a new contender is emerging from China, offering vehicles priced as low as $10,000. BYD, a Chinese company that produces over a dozen models of all-electric sedans, SUVs, and minivans, surpassed Tesla in electric car production last year for the first time.
BYD primarily markets its vehicles in China, the largest automotive market globally, while also seeking to grow its presence internationally.
International players are poised to transform consumer expectations by establishing new design benchmarks, offering high-end features, and implementing groundbreaking sales models that disrupt the traditional Indian EV market.
The arrival of BYD and Tesla is set to significantly reshape the Indian EV market by introducing new price tiers. At present, the market is largely filled with mid-range to budget-friendly models aimed at cost-sensitive buyers. However, with BYD and Tesla entering the scene, there will be a focus on the premium segment.
The launch of luxury electric vehicles is unlikely to undermine the current offerings. Rather, it will enhance the variety available to Indian consumers, allowing them to choose between affordable options and high-end, internationally acclaimed brands.
A significant aspect where BYD and Tesla are anticipated to make an impact is in the sales and distribution model. In contrast to conventional car manufacturers in India that depend on dealer networks, Tesla has established a direct-to-consumer sales strategy in various developed markets. This method has the potential to challenge the traditional dealership system and create a more efficient and customer-centric purchasing experience.
The electric vehicle market is still emerging, and the shift from internal combustion engines to electric vehicles will occur slowly over time. With global brands showing active interest in India, we may look forward to faster changes.