Indian Automobile VS Tesla

Nitesh
image comparing Tesla and Indian car brands on Indian roads

Recently i have seen crash in tata motors stock price. Many Investors are discussing causes for this and probable reason i founded is tesla entry in Indian market.

Understanding the Indian Car Market

Let's start with the basics and data.

What is the average car-buying budget for Indian consumers?

In 2022, the average budget for purchasing a car in India was around 6 lakh rupees. Means on an average people in India spends 6 lakh to purchase a car.

Do you know the per capita income in India?

It is less than 2 lakh rupees per year. Means every Indians annually atleast earning 2 lakh per year.

How many Indians earn more than 1 crore annually?

Less than 3 lakh people in the entire country fall into this category.

This is why most cars sold in India is like Maruti Suzuki (Swift, Wagon R, Alto), Tata Motors (Nexon, Punch), Hyundai (Creta, i20, Venue), and Mahindra (Bolero, Scorpio, XUV700). These cars fits best within the budget of the common Indian consumer, and more importantly, they are designed for Indian roads

The Reality of Indian Roads and Premium Cars

Premium vehicles require expressways and well-maintained roads. In USA , China  , Europe , their roads looks like premium. Well length and no potholes, and very less traffic jams. These countries spends more on their road quality maintenance. But in India, if you dream of being richer than the sarkar and decided to buy a luxury car, be ready to enjoy the thrill of potholes, narrow lanes, and traffic jams. 

How many Lamborghinis do you see running in India?

Less than 30 in the entire country. Even the ultra-rich people who buy such cars do it purely for their personal dream fulfillment, not for practical commuting.

Will Tesla Succeed in India?

Now let's talk about Tesla. If I estimate the starting price for an EV it will not be less than 40 lakh rupees. Do you really think most Indians will buy a Tesla? Money doesn’t grow on trees. If Tesla had seen a massive market opportunity in India, it would have entered the country long ago. The reason was as simple: India’s middle-class population, which forms the majority of car buyers, cannot afford a Tesla. Every car needs maintenance whether it runs on petrol or EV. Tesla car maintenance cost will be also skyhigh.

One thing Tesla can achieve from India is exports. They can sell their cars to other countries.

Why Tata, Mahindra, and Maruti Suzuki Will Continue to Dominate

Maruti Suzuki, Tata Motors, and Mahindra are all leaders in the Indian automobile industry. They understand:

The roads: They design vehicles that can handle India’s mixed road conditions.

The people: They manufacture cars that fit the financial capacity of the middle class.

The budget: They know how much Indians are willing to spend on vehicles.

The per capita income: They know that the majority of Indians cannot afford premium vehicles.

Tata Motors also has premium category vehicles too, but they don’t launch them in India. Why? Because they know that those cars will not sell.

Do you think Tata lacks technology or design?

Absolutely not. In fact, Indian automobile manufacturers have some of the best automotive engineers and designers in the world. They just know their market better than Tesla.

Investors Should Think Rationally

If you have invested in Tata Motors, Mahindra, or other domestic automobile companies, there’s no need to panic. There are rich people in India, and yes, some of them will buy a Tesla. But Tesla’s presence will not hurt the sales of Indian brands.

Think practically.

-Tata, Mahindra, and Maruti Suzuki will continue to dominate because they build vehicles for the Indian masses.

- Tesla’s pricing and infrastructure needs will keep it limited to a niche market.

- Domestic companies have already mastered the Indian market and will continue to grow.

So, instead of fearing Tesla’s entry, understand the bigger picture. The Indian automobile industry is in the hands of companies that truly understand the Indian consumer, and they are not going anywhere.


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