China seething about Tesla's India debut, claims EV maker will fail in 'underprepared, immature' market

China is apparently not pleased with Tesla setting up a factory in India and is seething at Elon Musk is expanding Tesla’s operations in China. A Chinese newspaper article, claimed that India’s “immature an underprepared markets” and “lack of adequate infrastructure” would fail Tesla

In a classic case of sour grapes, China is seething that Tesla is opening up a plant in India as it seeks to diversify its Asian operation beyond China.

Elon Musk’s plan to establish a Tesla electric vehicle plant in India has drawn some severe criticism the Chinese government as well as its Media, both of which seem to raise concerns about the viability of Tesla’s venture in the Indian market.

Musk’s announcement of his intention to meet with Prime Minister Narendra Modi has fueled speculation about Tesla’s ambitious project, which could involve a multi-billion-dollar investment to manufacture entry-level electric cars, potentially named Model 2 and priced around Rs 25 lakh.

Advertisement

Officials in the Chinese government, as reported by The Global Times, are sceptical about India’s preparedness to accommodate Tesla’s operations. They have expressed concerns about the country’s “underprepared” and “immature market” while claiming that the country “lacks the adequate infrastructure for EVs”.

The report by the Global Times went on to say that despite rapid growth, India’s EV adoption is still at its nascent stage as only 2.3 per cent of the total passenger vehicle sales in India account for EVs.

Furthermore, the article pointed out India’s reliance on coal for power generation, which may hinder its ability to achieve climate goals. It also underscored the limited domestic production of core EV components like lithium-ion batteries, posing a significant obstacle to Tesla’s operations in India. “One of the biggest issues is the limited domestic production of core components like lithium-ion batteries for EVs. India is starting relatively late in trying to create an indigenous EV supply chain,” the article said.

The Indian government has recently approved a new electric vehicle policy, partly in response to Musk’s persistent requests. The policy allows the import of completely built-up electric cars at reduced import duties for five years in exchange for a minimum investment of $500 million to commence local manufacturing.

It should be noted that despite its criticisms about India’s “underprepared” and “immature market” Chinese EV giants BYD and Great Wall Motor wanted to set up major factories in India, but were rejected by the Narendra-Modi-led government.

BYD was seeking permission to set up a $1 billion factory in India in partnership with Hyderabad’s Megha Engineering and Infrastructure Ltd which the central government rejected back in 2023. Similarly, in 2022, China’s Great Wall Motor wanted to purchase a manufacturing plant from General Motors in India. However, the Indian government blocked the sale.

Advertisement

China’s reaction to Tesla’s potential entry into India reflects broader geopolitical tensions and competition in the global automotive industry. Recent actions by the Indian government, such as rejecting proposals from Chinese automakers like BYD and Great Wall Motor, highlight India’s efforts to promote domestic manufacturing and safeguard its strategic interests in the EV sector.

As Tesla navigates these complexities, its decision to invest in India will undoubtedly shape the future landscape of the country’s automotive industry and its relations with major global players like China.

(With inputs from agencies)