In half a month, Tesla (nasdaq:tsla) completed the transformation from shelving the Indian market to finding a new market - Thailand. Recently, it is reported that Tesla has registered a company in Thailand with a registered capital of 3million baht (about 590000 yuan), and will sell electric vehicles, energy storage systems and solar products in the future.
Tesla submits an application to sell its products in Thailand
Tesla's move to the Thai market is inseparable from India's high import tariffs. Earlier, Elon Musk, CEO of Tesla, publicly said that he hoped to sell the car to India, but India's import tariff was too high, which was the highest among large countries. As for factory building, "Tesla will consider building a factory in India only after the imported cars have been successful in the Indian market."
According to the current policy of India, the tariff on imported cars is 60%-100%. The price of almost all Tesla models is higher than the tariff line of 60%. Tesla has proposed to the Indian government to cut the import tax on electric vehicles to 40%, but it has not been adopted.
Zhangjunyi, the managing partner of Aowei consulting, analyzed to caijingqiche (id:caijingqiche): "if India's tariff is not reduced, Tesla will not be able to export smoothly. Although building a factory in the local area can solve this problem, local policies are complex, and there are religious and linguistic barriers, so Tesla's priority is to export."
According to the existing information, Tesla only sells in Thailand, not sets up a factory. However, Zhang Junyi believes that considering the trend of Southeast Asia's development and integration, in the long run, selling in Thailand will help Tesla open the entire Southeast Asian market. Thailand's existing automobile industry chain can also lay a foundation for the future establishment of a factory.
"Thailand's automobile market is more concentrated than India's, and the challenges at the end of the automobile industry chain and supply chain are better than India's." Zheng Yun, global senior partner of Roland Berger and head of Greater China Automotive Industry Center, said to caijingqiche (id:caijingqiche).
While entering the Thai market, Tesla also plans to open factories in Indonesia. Indonesian investment minister bahlillahadalia disclosed last week that Tesla had agreed to build a battery and electric vehicle plant in Indonesia, but did not provide any details. He said that if the final agreement is signed soon, Tesla may even enter Indonesia this year.
Indian Automobile Market: great potential and high tariff
Tesla has been longing for the Indian market for a long time. As early as 2017, musk said on twitter that Tesla wanted to enter the Indian automobile market.
For Tesla, there are many temptations in the Indian auto market. In addition to India's large population and large automobile consumption demand, the local automobile consumption demand also needs to be upgraded. At present, the travel market is dominated by two wheeled and three wheeled vehicles, and there is room for the rise of four wheeled vehicles.
In addition, the low penetration rate of electric vehicles and a considerable number of luxury car consumers are also what Tesla likes.
"The electrification level and traffic level of India's automobile market are relatively poor, and there is still a lot of room for development based on population size and automobile penetration." Zhangjunyi said to caijingqiche (id:caijingqiche) that there are great differences in the consumption levels of the Indian automobile market. "The middle and low-end consumers use tricycles, but the sales of more high-end models, even luxury cars such as Mercedes Benz and BMW, have also increased significantly."
India's automobile consumption shows a trend of two-level differentiation. According to statista, a third-party statistics agency, 95% of cars in India sell for less than $20000. On the other hand, the growth of luxury cars is more and more obvious - although luxury cars account for less than 2% of the total sales of about 3million cars in India every year.
JATO dynamics, an automotive market data provider, found that Mercedes Benz is the best-selling luxury car brand in India, with a market share of more than 40%. In 2021, the sales volume of Mercedes Benz in India increased by more than 40% to 11242 vehicles, and the price is basically more than 10million rupees (about US $131337).
Ravi Bhatia, President of JATO dynamics India, said that the excellent performance of Mercedes Benz's high-end models reflected the affluence of Indians. "The rich became richer, and some of them eventually improved their way of life.".
But India's expensive import tariff is a big obstacle for Tesla. If you want to buy a Tesla in India, you need to pay the price of two cars.
According to the current policy of India, the tariff on imported cars is 60%-100%. The tariff on imported cars with a price below 3million rupees (about 40000 US dollars) is 60%, and 100% tariff will be paid if the price is higher. The price of almost all Tesla models is higher than the tariff line of $40000.
Therefore, Tesla has proposed to the Indian government to cut the import tax on electric vehicles to 40%. However, this proposal has not been adopted by the Indian government. The dispute between the two sides is mainly about whether to build a factory first or sell it first.
Musk hopes that the Indian government will cut the import tax first, so that Tesla can first sell in India at a competitive price to test the market situation and acceptance. But the Indian government says it wants to reduce taxes by making cars locally in India.
"Although building factories in the local area can solve the problem of high tariffs, the local policies are complex, and there are religious and linguistic barriers. Therefore, Tesla's priority is to export to India." Zhang Junyi explained.
According to foreign media reports, Tesla has shelved its plan to sell electric vehicles in India earlier this year and reassigned work for some local teams due to the failure to obtain a lower import tax.
Is Thailand a good choice
After the latest setback in its plan to enter India, Tesla now turns its attention to Thailand.
According to the existing information, Tesla's actions in Thailand are still limited to sales. Although the market size is not as large as India, Thailand has its own advantages.
The first is the market concentration and the advantages of the automobile industry. "The Indian market is too fragmented. Although the Thai market may have different levels of cities, it can be regarded as a unified market." Zheng said to caijingqiche (id:caijingqiche).
Zhang Junyi believes that considering the trend of Southeast Asia's development and integration, in the long run, selling in Thailand will help Tesla open the entire Southeast Asian market. In addition, the existing automobile industry chain in Thailand is more complete than that in India, which can also lay a foundation for future plant construction.
Thailand is an important automobile producer and exporter in Southeast Asia. The output value of automobile manufacturing industry accounts for about 10% of the total industrial output value of the country.
According to the data released by the Confederation of Thai industry, the total output of Thai cars in 2021 was 1.72 million, of which 960000 were exported, an increase of 30.35% over 2020. Surapong, spokesman of the automobile industry branch of the Thai Federation of industries, said that the automobile industry is expected to achieve new growth in 2022, with a total output of 1.8 million vehicles, of which exports are expected to reach 1million.
With the rise of new energy vehicles, Thailand has also set its own small goal of industrial transformation - to build the largest electric vehicle manufacturing and export center in Southeast Asia. By 2030, the zero emission vehicles produced in the country will reach 30%-50% of the total output, and strive to achieve 100% by 2035. By 2036, sufficient charging facilities and power system support will be provided for the planned 1.2 million electric vehicles.
On the import tariff that Tesla is most concerned about, Thailand also provides more preferential measures. According to the Thai Business News Network, in April, Thailand introduced a package of incentive schemes aimed at promoting the development of the local electric vehicle industry.
According to the new incentive scheme, the import tariff of pure electric vehicles with a price of no more than 2million baht (about 59600 US dollars) will be reduced by 40%, and the import tariff of electric vehicles with a price between 2million and 7million baht (about 208500 US dollars) will be reduced by 20% from 2022 to 2023. In terms of consumption tax, imported electric vehicles will also be reduced from 8% to 2%. The Thai side predicts that after the above tax reduction measures are implemented, the country can add 7000 electric vehicles within one year.
Although Tesla has not officially entered the Thai market, Thailand already has some Tesla cars. According to foreign media reports, in 2020, the Thai police purchased a batch of Tesla Model 3 for patrol.
According to the data collated by EV Plaza, Tesla Model 3 is the second pure electric vehicle (222 vehicles) in the Thai market in 2021. There are few sales data. On the one hand, it is related to the size of the electric vehicle market in Thailand. On the other hand, Tesla has not officially entered Thailand as a pure imported vehicle.
Article ｜ edited by Guoyu ｜ wangjingyi