2Tesla's Sustainable Entry into the Indian Market

In 2021, Tesla Inc., with a market capitalization exceeding $800 billion, declared its intent to
venture into the Indian market, strategically aligning with the company's global expansion
ambitions and unwavering commitment to sustainability. The move aimed to capitalize on India's
growing middle class and the government's push towards electric vehicles (EVs) and renewable
energy.

Entry into a nascent market

Tesla's entry strategy into India reflected a careful and phased approach. Initially, the company
focused on importing and selling completely built units (CBUs) to measure market demand and
establish its brand presence. Simultaneously, discussions with Indian authorities were initiated
to explore the potential for local manufacturing and assembly plants, consistent with Tesla's
global strategy of decentralized production for efficiency and market adaptation.

Recognizing the price sensitivity of the Indian market, Tesla explored partnerships with local
financial institutions to provide attractive financing options. This move aimed at ensuring
affordability and accessibility for a broader customer base, a critical factor in a market where
cost considerations play a pivotal role in purchasing decisions.

India's Prime Minister Narendra Modi also said to have made a push for local production of
Tesla models in the country, both for the domestic market and for export, as part of the
country's high-tech industrial initiative.

Sustainability Integration

Tesla's sustainability commitments were interwoven into its Indian entry strategy. The company
aimed to introduce its entire portfolio of electric vehicles, emphasizing the environmental
benefits and low operational costs of EVs. In addition, Tesla engaged in discussions with Indian
energy companies to explore collaborations on solar energy solutions and charging
infrastructure, aligning with its global commitment to fostering a sustainable energy ecosystem.

Challenges and Adaptations in an emerging market

The Indian market has brought some unique challenges to Tesla despite the promising
prospects. High import duties initially posed a regulatory hurdle. To address this, Tesla engaged
in constructive dialogues with Indian authorities, advocating for supportive policies and
showcasing the potential economic and environmental benefits of widespread EV adoption.

To cater to Indian driving conditions and preferences, Tesla considered adaptations to its
vehicles. This included exploring the introduction of more affordable variants with different range
options and contemplating localized manufacturing to reduce costs and enhance market
competitiveness.

Another challenge is India’s price sensitive market. Tesla plans to produce a low-cost EV priced
at $24,000 - about 25% cheaper than its existing entry-level model - for both the Indian market
and export.
Developing a local network

Acknowledging the significance of local responsiveness, Tesla actively participated in

community engagement and education initiatives. The company collaborated with local
influencers, participated in industry forums, and organized outreach programs to dispel myths
surrounding EVs, fostering a positive perception of the brand among the Indian populace.

In conclusion, Tesla's foray into the Indian market needs a comprehensive and adaptive
strategy that harmonizes global best practices with an acute understanding of local frameworks.
The integration of sustainability not only aligns with Tesla's overarching mission but also
resonates with the evolving values of the Indian consumer.