Tesla is eyeing India — but a rival says that's 'good for the industry'
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- Tesla has reportedly been considering building a new factory in India, the world's third-largest car market.
- MG Motor India executive Rajeev Chaba told CNBC the move could boost India's EV market.
- Only a fraction of vehicles sold in India are electric, but that could be about to change.
Tesla has been eyeing an expansion into India — and one local auto executive thinks it'll be good for business.
MG Motor India's CEO Emeritus Rajeev Chaba told CNBC that Tesla's potential entry into the Indian market could help boost the country's low rate of EV adoption.
"Tesla is really welcome. It'll be good for the industry, good news for the country, and for serious players like us," Chaba told CNBC.
MG Motor currently sells two types of EVs in India; it recently announced a joint venture with JSW Group to roll out more EVs in and capture a larger slice of the market there.
"I wish more and more players come, with more and more choices. Because that will give the consumer a chance to look at the various options and go for it," he added.
The auto exec told CNBC that a lack of competition was hampering India's EV industry.
The Indian government has set a target of 30% of all vehicle sales to be electric by 2030. Between October 2022 and September 2023, EVs accounted for around 5% of total vehicle sales, according to data from Bain and Company.
"Competition is limited at this point of time. Numbers are still constrained because consumers don't have compelling choices," Chaba said.
Tesla has been eyeing India as a potential area for expansion as it grapples with a slowdown in EV demand and growing competition in markets such as China.
Foreign EV companies have previously been deterred from entering the world's third-largest vehicle market because of high import taxes on electric cars.
However, a new policy that provides an exception for automakers who invest at least $500 million to produce their cars in the country and who set up manufacturing facilities within the next three years — suggests that may be about to change.
Reuters reported earlier this month that Tesla is planning to build a new factory in the country as part of a $2 to $3 billion investment, and CEO Elon Musk was due to meet Indian Prime Minister Narendra Modi this week to announce the move.
Those plans may have to wait. Musk postponed his trip to India due to "very heavy Tesla obligations," with the automaker recently announcing a 10% cut to its staff and a high-profile Cybertruck recall.
Tesla did not immediately respond to a request for comment made outside normal working hours.