Tesla scouts for showroom space in India, hires executive for lobbying - sources
By Aditi Shah and Aditya Kalra
NEW DELHI (Reuters) - Tesla Inc is looking for locations to open showrooms in three Indian cities and has hired an executive to lead their lobbying and business activities prior to scheduled entry into the country, sources said with the discussions are familiar, told Reuters.
The electric car maker registered a local company in India in January that is expected to import and sell the Model 3 sedan as early as mid-2021 to appeal to rich customers in a niche market.
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The world's most valuable automaker by market capitalization is looking for commercial properties, each measuring 20,000 to 30,000 square meters, to open showrooms and service centers in the capital New Delhi, the financial center of Mumbai to the west and the technology city of Bengaluru to the south, said.
Separately, Tesla has hired Manuj Khurana, a former senior executive with India's investment advancement body, Invest India, as the first large-scale employee to lead its policy and business development efforts in the country, two other sources said.
Tesla didn't respond to a request for comment, while Khurana refused to comment.
In October, Tesla CEO Elon Musk said on Twitter that the company will "certainly" travel to India in 2021, despite the billionaire's previous tweets.
The search for showrooms and Khurana's appointment signal Tesla is progressing faster.
Global real estate consultant CBRE Group Inc, hired by Tesla to search the showroom, has been researching locations for several weeks, focusing on locations that will make it easier for the company to access wealthy customers.
Some luxury auto showrooms in upscale metropolitan areas are typically between 8,000 and 10,000 square feet, but most showrooms in India are far smaller, where quality real estate is typically in short supply and real estate prices in New Delhi and Mumbai below are the highest World.
"If you look at Tesla's showrooms around the world, they are like experience centers. It would be a matter of doing this again with some modifications for the Indian market," said one of the sources, all of whom refused to be identified as the conversations were private are.
CBRE said it does not comment on "the work we may be doing on behalf of our clients".
Khurana previously served on a government body on the future of transportation led by Prime Minister Narendra Modi's senior scientific advisor. In his new role, he's also overseeing Tesla's market entry process in India, two sources said.
But India is unlikely to be an easy-to-crack market for Tesla.
The country has negligible charging infrastructure and high taxes on imported cars, as well as low acceptance of electric vehicles.
India had just 5,000 EV sales out of a total of 2.4 million cars sold last year, while China's new vehicle sales hit 1.25 million.
However, analysts say India's growing number of affluent consumers makes it a market the automaker cannot ignore as the government increases its focus on promoting cleaner cars.
While Tesla plans to import cars initially, the Indian road minister told Reuters last month that the government was ready to offer incentives to ensure the automaker's production costs would be less than China's if it committed to manufacturing locally .
(Reporting by Aditi Shah and Aditya Kalra in New Delhi; Editing by Kim Coghill)
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