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Tesla teams up with Ashok Leyland to enter India

Tesla teams up with Ashok Layland to enter India

The leader in the industry of clean energy automotive- Tesla has received an invitation to the Indian markets from the Chief Digital Officer(CDO) of Ashok Leyland Mr Venkatesh Natarajan. The hand was first extended by the Chief Financial Officer Mr Deepak Ahuja. The plans came to a standstill when Mr Ahuja retired with the plans still in the pipeline. With a fresh approach from Mr Venkatesh Natarajan, the dream seems more alive than ever. Along with the offer to Tesla the CDO also clarified that the partnership won’t be exclusive, many entities will join hands for the same.

 

Elon Musk has previously expressed his disappointment to the elaborate control laid by the regulatory authorities on the Foreign Direct Investment norms of the nation. If the olive branch is accepted Tesla wheels could soon be seen driving Indian roads. In his recent tweet Musk mentioned the possibility of penetrating the Indian market in 2019 or by 2020.

Ashok Leyland’s opportunity:

 

This opportunity will also be a great way for Ashok Leyland to increase its market share in the commercial vehicle sector. The company is the largest bus manufacturer in India and the fourth largest in the world. In April 2019, the company’s sales volume for domestic vehicles grew by 10% at 13,141 units compared to 11,951 units in April 2018. Ashok Leyland Q3FY19 results showed revenue of Rs. 6,325 crores. The first 3 quarters of 2019 showed a revenue increase of 15% compared to the corresponding period in 2018. Rating agency ICRA has affirmed the company’s financial profile will remain healthy on account of stable demand for medium and commercial vehicles. Following this affirmation, the rating agency has also upgraded the long-term rating of fund based limits of the company. The rating was changed from AA to AA+ with a stable outlook.

Tesla:

 

Based out of Palo Alto California Tesla was incorporated in 2003. The company has all-electric cars but also has clean energy generation and storage products. Tesla believes electric cars can be better, quicker and fun to ride than the petrol/diesel cars. And the company has successfully proved this by their electric car models in the past years. Tesla Inc. has a market capitalization of $ 36.25 billion as on 21st May 2019.

Tesla had its manufacturing plant solely in the US until recently when they opened a factory in Shanghai. This Gigafactory is expected to produce 500,000 electric vehicles every year. The factory is the first factory outside the US.

Tesla’s car price ranges from $35,000 to $58,000. The company is expecting to enter the Indian market with Model 3 of the electric car that sells for nearly $35,000.

 

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