A cheaper Model 3, which is the entry-level Tesla, can only be possible with local manufacturing of battery components and a strong EV supply system, for which Musk will surely have a substantial announcement to make during his maiden visit to the country.
Currently, Tesla prices are almost the same worldwide. The base variant of the Model 3 is priced at over USD 40,000 (nearly INR 33.5 lakh).
According to senior analyst Soumen Mandal from market intelligence firm Counterpoint Research, the import duty will be eliminated by setting up local production by Tesla, thus paving the way for an affordable Tesla car.
Also, the cost reduction could be achieved if Tesla cars manufactured in the country come with fewer features compared to the ones available globally.
Mandal told IANS that certain hardware required for Full Self-Driving (FSD) mode could be eliminated and "Advanced Driver Assistance System (ADAS) Level 2 could be included".
Tesla can eventually produce 5 lakh electric vehicles annually that start from INR 20 lakh in India.
To produce a INR 20 lakh car, Tesla can also have a battery pack with a lower capacity than 50kW and the electric motors could be of lower power. The in-vehicle electronics could also be reduced with a smaller centre display.
In the new EV policy, the Indian government has cut the customs duty to 15% (with certain riders) from the earlier 100% on imported cars.
A minimum investment of INR 4,150 crore (about USD 500 million) will be required to set up the manufacturing facilities for EVs in the country.
According to industry experts, Tesla can generate at least USD 3.6 billion in revenue in India by 2030.
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