Tesla scouts for showroom space in India, hires executive for lobbying-sources

Tesla Inc is scouting for locations to open showrooms in three Indian cities and has hired an executive to lead its lobbying and business efforts ahead of its planned entry into the country, sources familiar with the discussions told Reuters.

The electric-car maker, in January, registered a local company in India, where it is expected to import and sell the Model 3 sedan by as early as mid-2021, seeking to target rich customers in a niche market.

The automaker is looking for commercial properties in New Delhi, Mumbai and Bengaluru, three sources said. Separately, Tesla has recruited Manuj Khurana, a former executive of Invest India, to lead its policy and business development in the country, two other sources said.

Tesla did not respond to a request for comment, whileKhurana declined to comment.

In October, Tesla CEO Elon Musk said on Twitter the companywill enter India in 2021 “for sure”, though the billionaire hadissued similar tweets in the past.

The search for showroom space and Khurana’s appointmentsignal Tesla is moving faster.

Global property consultant CBRE Group Inc – hiredfor the showroom searches by Tesla – has been surveying placesfor several weeks and is focussing on locations which will givethe company easier access to affluent customers, sources said.

Some luxury car showrooms in upmarket areas of metro citiesare typically between 8,000-10,000 square feet, but mostshowrooms are far smaller in India where high-end real estatespace is usually in short supply and property prices in NewDelhi and Mumbai are among the highest in the world.

“If you look at Tesla’s showrooms globally, they are likeexperience centres. It would look at replicating that with somemodifications for the Indian market,” said one of the sources,all of whom declined to be identified as the talks are private.

CBRE said it does not comment “on work we may be doing onbehalf of our clients”.

Khurana has previously been on a government panel on thefuture of transportation led by Prime Minister Narendra Modi’stop scientific adviser. In his new role, he is also handlingTesla’s market-entry process in India, two sources said.

But India isn’t likely to be an easy market to crack forTesla.

The country has negligible charging infrastructure and hightaxes on imported cars, as well as low adoption of electricvehicles (EVs).

India recorded just 5,000 EV sales out of the total 2.4million cars sold last year, while in China new energy vehiclesales touched 1.25 million.

However, analysts say India’s rising number of affluentconsumers makes it a market the automaker can’t ignore as thegovernment increases its focus on promoting clean cars.

While Tesla plans to import cars at first, India’s roadminister told Reuters last month that the government is ready tooffer incentives to ensure the carmaker’s production cost wouldbe less than in China if it commits to local manufacturing.


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