Tesla could generate $3.6 billion in revenue from India alone by 2030: Experts

Elon Musk, CEO, Tesla has recently confirmed his first-ever visit to India to meet with Prime Minister Narendra Modi later this month. Musk's visit aims to announce key investments in the electric vehicle (EV) space, with industry experts suggesting that India could become a significant market for him in the foreseeable future, generating at least $3.6 billion in revenue by 2030, a report by IANS stated.

The news of Musk's arrival has delighted millions of Tesla enthusiasts in India, following PM Modi's successful efforts to persuade Musk to consider India as the next destination for building a Tesla plant and establishing a global supply chain system. Industry experts have long discussed Musk's intentions to enter the Indian market, and the visit is expected to lead to significant announcements, including potential duty cuts on imported Tesla cars and the establishment of an official sales and service presence in the country.

India's current EV penetration stands at 2.3 per cent, projected to reach 28 per cent by 2023. Electric cars priced around $25,000 are expected to capture at least a 15 per cent market share by 2030. According to Soumen Mandal, a senior analyst at Counterpoint Research, Tesla could achieve $3.6 billion in revenue from car sales in India alone by 2030, considering the increasing complexity of cars, which are evolving into supercomputers on wheels.

“The list of possible announcements includes India providing duty cuts on imported Tesla cars, the company establishing an official sales and service presence in the country, followed by possible manufacturing facilities further out," Mandal explained.

"India could grow into a considerable market for Tesla in the long term. As cars effectively become supercomputers on wheels, we anticipate Tesla could achieve $3.6 billion in revenue from car sales in India alone by 2030," he added.

Furthermore, India is poised to become a manufacturing hub for cars priced below $25,000, offering export opportunities to developing and underdeveloped nations. Tesla's prioritisation of establishing its supercharger network could also expedite the growth of India's EV charging infrastructure, akin to the standardization observed among US automakers with the adoption of the North American Charging Standard (NACS).

Liz Lee, Associate Director at Counterpoint Research, anticipates a significant upsurge in the country's EV landscape. Government initiatives like the production-linked incentive (PLI) scheme for Advanced Chemistry Cells (ACC) and the recent reduction in import duties on EVs priced under $35,000 to 15 per cent are viewed as pivotal game changers for the EV industry in India.

Car sales in India are projected to grow at a compound annual growth rate (CAGR) of 6.3% between 2024-2030, up from 4.4 million units sold last year. In contrast, the CAGR for electric vehicles (EVs) is expected to reach an impressive 52 per cent during the same period, a trend viewed as a "natural progression" for India, as noted by Elon Musk.

Experts anticipate that Tesla's entry into the Indian market could catalyze the development of supply chain ecosystems, leading to the localization of automotive components manufacturing. This, in turn, could accelerate India's evolution into a key player in the global EV market.