Tesla is making its entry in India with a bang. The company has already appointed three directors for the Bengaluru branch. It has also promised to start deliveries in India from mid of 2021. Tesla’s arrival news in India has also sparked the prices of battery shares and companies like Tata Motors. And these companies have been seeing a constant rally and have at least grown by 25% in the past month. With so much going on, reports suggest that Tesla is going to bring in Indian investment through their Dutch Arm.
Why is Tesla using its Dutch Arm for investment?
Tesla has chosen its Dutch ARM to route Indian investment for several reasons. One of the main ones is the tax benefits that it brings with itself. It is also going to bring several capital gains and other profits with itself. Do note that Tesla Motors Amsterdam branch is the parent company of Tesla, according to their books. This investment plan of Tesla also goes in line with the other car companies that entered Indian earlier. For example, General Motors brought in investment from China, while Kia Motors brought investment from South Korea.
The India-Netherland treaty is one reason that Tesla plans to invest with its subsidiary. There are main tax exemptions and benefits that investment coming from the country will experience. So, it becomes an obvious choice for the company to route their money to India from there. Other than that, there aren’t many benefits that India provides to investment from other countries.
Tesla’s future in India
Tesla is a great company, and its vehicles are great, but I still think that the country’s infrastructure isn’t there yet. The roads aren’t proper, there aren’t enough charging stations, no proper services, and there is still a lack of quality among drivers. This all adds up to become a big factor for the failure of autonomous EVs. The company is definitely not going to perform as well as it did in other countries like China and the US.
Another factor that is going to be a huge downside for the company is the pricing. Since the vehicles are not being manufactured in India but imported from the US, the heavy tax and duties double the prices of the vehicles. Considering that with the fact that, the per capita income in India is much lower as compared to the US, I don’t see the sales figures of the company being something astounding. But if the company is able to stick to India and work towards manufacturing, and drop prices, something good might happen for them.
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