The American electric automotive giant Tesla is about to enter India. It has been confirmed by Elon Musk that he will be soon meeting PM Narendra Modi. However, amidst this positive news, recently a Chinese analyst has shared his skepticism online. Charles Liu, a senior fellow at the Taihe Institute, has shared his insights regarding Tesla’s ambitious plans to establish a manufacturing presence in India.
Liu, known for his expertise in global economic dynamics, recently shared his critical assessment of the hurdles for Tesla. He stated that the company might encounter these issues in the Indian market. His remarks have shed light on key factors such as infrastructure, supply chain, human capital, and market dynamics.
Infrastructure and Supply Chain Challenges
Liu, in a recent video, expressed skepticism about India’s readiness for large-scale electric vehicle (EV) manufacturing. He highlighted the absence of a robust supply chain and inadequate infrastructure as major obstacles.
According to Liu, he has extensive experience with projects in India over several decades. He revealed that there are systemic issues such as bureaucratic red tape, corruption, and a challenging business environment. These factors, he believes, could hamper Tesla’s manufacturing efficiency and effectiveness in India.
Comparing India to China, Liu pointed out China’s superior infrastructure and well-established supply chain network. He states that China’s extensive spread of charging stations is beneficial for EVs. However, this is a feat yet to be achieved by India, stated Liu.
Human Capital and Manufacturing Expertise
During his assessment, he shared another crucial aspect. He said that the availability of skilled human capital for manufacturing operations is less in India. He highlighted that on the other hand, China has decades-long investment in developing manufacturing capacity and training skilled workers and engineers.
Liu emphasized that in contrast, India will be unable to provide the necessary talent pool for advanced manufacturing processes. He added that building such expertise takes time and cannot be achieved overnight in India.
Market Access and Protectionism
Apart from the above-mentioned points, Liu raised questions about the potential trade barriers Tesla may face in India. He stated that Tesla could face major problems while accessing the American market with vehicles manufactured in India.
To explain his question he compared the treatment of Chinese EVs in the US market. He then suggested that protectionist measures could hinder Tesla’s competitiveness.
Liu also argued that Chinese EVs benefit from government subsidies. This leads to more efficient and cheaper products. However, he criticized the hypocrisy of blocking access to superior EVs while advocating for environmental protection and combating climate change.
Is Liu right about India’s readiness for Tesla?
The points put forward by Liu are somewhat reasonable. However, it does not mean that India is not ready for an EV giant like Tesla. Most likely, Tesla, which has been eyeing to set up its factory in India, has already done extensive research.
The company is about to set up its first manufacturing plant in the country. And as we all know, this means that they will be making billions of dollars as an investment in India. So it makes sense to believe that they have done their due diligence. However, what happens in the future regarding Tesla’s entry is yet to be seen.
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