Tesla Inc is gearing up for an India launch but the U.S. electric carmaker is likely to remain a niche player for years, catering only to the rich and affluent in the world’s second-most populous nation.
India’s fledgling electric vehicle (EV) market accounted for only 5,000 out of a total 2.4 million cars sold in the country last year. A lack of local production of components and batteries, negligible charging infrastructure and the high cost of EVs mean there have been few takers in the price-conscious market.
It’s also difficult to see how Tesla’s sought-after and expensive autonomous driving features will work on India’s congested roads.
Ammar Master, a forecaster at consultancy LMC Automotive, said he expects Tesla to annually sell only 50-100 of its Model 3 electric sedans in India, at least in the first five years.
“As a country, India is still not so environmentally conscious to pay that much of a premium,” Master said.