Billionaire investor and Tesla (TSLA) CEO Elon Musk and Indian Prime Minister Mr. Narendra Modi’s meeting at the White House last week is signaling the possibility of the electric vehicle (EV) maker’s entry into India. The company has posted 13 job openings on Microsoft’s (MSFT) LinkedIn. These openings are for different roles in both Mumbai and Delhi. This could probably be the beginning of Tesla’s actual foray into India after years of showing interest in the Asian nation.
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Tesla’s On-and-Off Engagement with India
Tesla had a number of on-and-off engagements to enter India’s automobile market. However, India’s heavy import duties have been a barrier to the company’s entry into the country. Recently, the Indian government slashed custom tariffs on cars to 70% from 110% for automobiles costing more than $40,000. This could be one of the reasons for the reignited interest in India.
The government has also introduced the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), which promotes setting up local EV manufacturing facilities with a minimum investment of $500 million. According to this scheme, the unit has to source parts and components domestically by up to 25% by the third year and 50% by the fifth year.
Notably, the job openings in India hint at Tesla setting up shop for customer service and other back-end operations. The job postings include Service Technician and Manager, Order Operations Specialist, Parts Advisor, Delivery Operations Specialist, Business Operations Analyst, and Store Manager, among others.
During earlier discussions, Tesla showed interest in opening three plants and at least two showrooms in India. The manufacturing facilities were to be set up in Gujarat and Andhra Pradesh, while the outlets were to be opened in Mumbai, Delhi, and Hyderabad.
Musk’s Interest in the Indian EV Market
India’s EV market is growing at a snail’s pace, with roughly 100,000 EVs sold last year. The country is in the nascent stages of development in the EV sector but boasts a large and growing population like China’s. Musk probably wants to reduce Tesla’s overdependence on China, and India could be a viable option.
Unfortunately, Tesla recently reported its first annual drop in EV sales in the last ten years, as heated competition from domestic Chinese players ate up its market share. EV maker BYD (BYDDF) is Tesla’s largest rival and threat to its sales in China.
Is Tesla a Good Stock to Buy?
Wall Street prefers to remain on the sidelines on Tesla stock as waning EV demand impacts its performance. On TipRanks, TSLA stock has a Hold consensus rating based on 13 Buys, 12 Holds, and 10 Sell ratings. Also, the average Tesla price target of $340.50 implies 4.3% downside potential from current levels. In the past year, TSLA stock has zoomed over 83%.
