Will Tesla, Apple Help India Rewrite 2021 Manufacturing Story

CIOReviewIndia Team | Tuesday, 27 October 2020, 09:47 IST

In between the pandemic caused economic fall, India can positively look at two significant occurrences next year when Elon Musk formally announces Tesla’s entry into the country and Tim Cook opens the first Apple retail store, along with a trust on assembling/manufacturing more products in the country.

The big investments in the form of Tesla and Apple are set to get India as a brand on the world map, further signaling the end of the dependence on China-led investments in the tech and auto sectors, alongside ensuring job creation and wooing more foreign investment.

The key modalities for Tesla’s entry into the country is yet to be finalized in between the concerns over an absence of a supercharging station network and a Gigafactory, or a collaboration with an Indian EV maker. It is clear that Musk this time has taken oath to witness Tesla cars run on the Indian roads after ditching the country several times before.

Already, Maharashtra government has invited Musk, but, also an Indian team working on the next year for scheduling Tesla entry and releasing order configurator in January.

It is still unknown whether Musk will announce a Tesla plant or collaboration with an existing player like Mahindra Electric in India for pushing the Prime Minister Narendra Modi’s domestic manufacturing dream or source the EVs from other facilities (like Gigafactory in Shanghai, China which is the nearest one).

Driven into the China EV market, Tesla is turning out thousands of Model 3 sedans this year with a growing share of China’s EV market.

The leading tech policy and media consultant Prasanto K. Roy, Tesla’s says India plans are not known.

“It is predicted Musk could aim for 20 million vehicles globally by 2030, replacing 1 per cent of the global fleet each year. Up to a tenth of that could come from India. But neither Tesla nor India will be ready in 2021 for any major ramp-up in EVs,” Roy told IANS.

Roy said he is expecting Tesla to look at a three-pronged India strategy.

Roy said, “A base for software, testing and R&D, explore distribution tie-ups for charging networks and support for Model 3 buyers and evaluate tie-ups for initially assembling Model 3, while sourcing local suppliers for the body and components other than motor, battery and charger.”

Apple last month launched its exclusive Store Online in India, which is set to open it first branded retail store in 2021, in addition a mega push to assembling its new iPhones and other products via third-party contractors in the country.

Presently, iPhone XR and iPhone 11 are being assembled by Foxconn at its Chennai manufacturing plant while iPhone 7 is being assembled by Wistron in Bengaluru.

In the Bengaluru facility, the new iPhone SE 2020, is being assembled by Apple supplier Wistron.

For many years, Apple has been here despite lower impact on the mobile phones market. Now, Apple’s contract manufacturers are slowly moving more production to India for reducing dependence on China.

Roy said, “Its models are still expensive and ‘local manufacturing’ alone may not fix that problem. Apple does not manufacture itself as it outsources production to contract manufacturers, like Foxconn in Chennai (iPhone 11 and XR). The iPhone 12 is likely to be made next year in a new Bengaluru plant run by another Taiwanese contract manufacturer, Wistron.”

Based in Cupertine, the $2-trillion company had a strong run in the third quarter this year, where it shipped nearly 8 lakh units in the country and registering double digit growth as per Canalys, a market research firm.

Rushabh Doshi, Canalys Research Director, said, “Apple is finally paying attention to India.”

Prabhu Ram, Head Industry, Intelligence Group, CMR, said that

“Apple turned around its India story in 2019 and there is no looking back since then. Apart from increased local manufacturing, Apple found favour with customers, with its prudent pricing and refined channel strategies.”

Roy said, “The EV arena, however, will be a big focus for growth and jobs, a reason why Maharashtra is keen to get Tesla in, and Tamil Nadu, Karnataka, Haryana and others will be fighting to bring Tesla in.”

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