While 2023 was marked by a slowdown in the EV market and a price war initiated by the major manufacturers to try and offset the lessened demand, Elon Musk’s Tesla (NASDAQ: TSLA) has proven its considerable resilience.
The company not only managed to continue increasing the number of vehicles produced and delivered, but its stock also experienced a 117.95% growth since January 1st. Now, the EV maker is likely to find a new avenue of expansion as it is close to reaching an agreement with the Indian government, per a Bloomberg report from Tuesday, November 21.
The deal could provide Tesla with access to a new market boasting well over 1 billion potential customers. It would also entail the building and opening of new factories within the country. Once Tesla vehicles start rolling off the assembly lines – rumored to be made in Gujarat, Maharashtra, or Tamil Nadu – they may sell for as little as $20,000 per car.
The agreement is likely to be officially announced in January at the Vibrant Gujarat Global Summit, and the new factories could open within two years, according to Bloomberg’s sources.
Barries to Tesla’s entry into India
Currently, Tesla is refraining from importing its vehicles directly to India due to the country’s large tariffs that go as high as 70% on vehicles that cost less than $40,000 and as high as 100% for those costing more than $40,000.
Previously, the Financial Times reported that Tesla is in talks with the Indian government on possible tariff cuts. Tesla’s expansion into the Asian country’s market could offer significant growth potential to the EV maker due to the immense number of potential customers.
However, it is important to note that the demand for electric cars is currently relatively low in India, with only about 1.3% of all passenger vehicles sold in the country last year being EVs. This could change, however, should the price of an Indian-built Tesla be as low as $20,000.
Such a price reduction is likely made possible by recent construction innovations achieved by Elon Musk’s firm that are expected to lead to the making of a €25,000 ($27,365) model in the Berlin factory already in 2024.
Tesla stock price analysis
The expansion into the Indian market has the potential to significantly bolster Tesla’s already impressive stock market performance this year. The company’s stock stood at $235.60 at the time of publication, meaning it rose 0.55% in the last 24 hours.
Additionally, Tesla’s performance throughout the year has been strong as it is not only up 117.95% year-to-date but is also 11.09% in the green in the 30 days and 24.74% up in the last 6 months.
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