Tesla: will the next gigafactory be in India?

Tesla: will the next gigafactory be in India?


Among the countries with the most disruptive growth forecasts, India occupies a leading position. Its pool of workers will soon exceed China's supply, with much lower labor costs. This last aspect could guarantee the Asian giant a competitive advantage, especially when it comes to attracting foreign investments. Tesla could take advantage of advantageous tax conditions to set up a gigafactory on Indian territory.

The proposal was made by the Minister of Transport Mitin Gadkari, who would like to persuade Elon Musk to invest in India. The arguments for doing so are all related to low labor costs and a availability of workers that is unmatched in the rest of the world. Taking advantage of these favorable (from the production point of view) proposals, Tesla could start a low-cost production, which would have as a direct consequence a reduction in the list price of the cars.

Should the Californian company decide to establish itself in India, the government, by Gadkari's admission, would be ready to allocate numerous subsidies to facilitate its settlement, with permits and concessions that would be available after a few weeks. The long-term goal is to create a strong economic fabric, which involves local companies in the production process, perhaps as component suppliers. To stimulate Musk's interest, the Indian government would be ready to grant authorizations for the construction of a Hyperloop between Delhi and Mumbai.

The suggestion is very strong: in India Tesla would not only find several subsidized investment proposals, but would also have the opportunity to enter a market that is worth millions of new cars every year. Of these, a small part is occupied by electric, Tesla's presence could generate a positive momentum towards a more sustainable transition, offering the American manufacturer the opportunity to enter a market with overwhelming possibilities.

Volkswagen’s Electric Car Stacks Up Well Against Tesla in UBS Teardown

(Bloomberg) -- A teardown of Volkswagen AG’s first dedicated electric vehicle found it measures up favorably to Tesla Inc. models in several key aspects, sending the German carmaker’s shares to levels last seen before its diesel emissions scandal.

The deep dive into the ID.3 by UBS Group AG analysts found the platform underpinning VW’s EV models will be fully cost competitive with Tesla and boast best-in-class energy density and efficiency. Analysts led by Patrick Hummel called the car “the most credible EV effort by any legacy auto company so far.”

VW common shares climbed as much as 5.6% to 209 euros, the highest intraday since July 2015, the month that eventual Chief Executive Officer Herbert Diess joined the company from BMW AG. UBS raised its price target to 300 euros.

chart: VW trades at the highest since before its emissions scandal © Bloomberg VW trades at the highest since before its emissions scandal

UBS’s assessment is the latest positive development for an EV that got off to a bumpy start last year. Production hiccups, software glitches and disruptions related to the Covid-19 pandemic plagued the ID.3 launch and cast doubt over the ability of traditional automakers to field products that can compete with Tesla’s Model 3.


“The market has been waiting” for VW’s battery-electric vehicle production to ramp up, and for “proof points,” Diess tweeted Wednesday. “So here we are.”

VW is primarily targeting Europe with the ID.3 hatchback and flanking the car with a crossover sibling, the ID.4, that will be produced in China and the U.S., in addition to Germany. VW group brands Audi, Skoda and Seat also will introduce vehicles this year that share the same underpinnings to boost economies of scale. Ford Motor Co. also will license VW’s modular EV platform to make a compact car in Europe, adding additional volume.

Related: Ford Going Almost Entirely Electric in Europe This Decade

VW plans to at least double the share of its sales that are fully electric this year to between 6% and 8%, suggesting it might narrow the gap with Tesla by boosting deliveries to roughly 700,000 cars. Tesla expects to hand over at least 750,000 vehicles in 2021.

“VW might not be the Apple, but the Samsung of the EV world, with profitable, high-volume EV brands,” UBS’s Hummel said. He estimates the ID.3’s gross margin is around 15%, “already almost on par” with VW’s combustion-era Golf model.

(Updates with CEO’s tweet in the fifth paragraph.)

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