Although there isn’t much competition in India’s electric vehicle market now, foreign automakers like Tesla will level the playing field, according to MG Motor India CEO Emeritus Rajeev Chaba.

Currently, there isn’t much competition. Because consumers don’t have many attractive options, numbers are still limited, Chaba said to CNBC’s Sri Jegarajah in Gurugram, India.

About 5% of India’s car industry is made up of electric vehicles, according to Bain & Company.

The Indian government wants to sell 30% more electric vehicles by 2030, but Chaba said that figure would be closer to 20% or even 30% if more government initiatives are put in place to draw in global automakers.

“When India as a market gets attention, more and more players and investments will come in. [Tesla] will definitely help in developing the ecosystem and some consumers will go for them,” Chaba said.

The government only revealed last month that, provided automakers achieve specific standards, import tariffs on a select range of electric vehicles would be reduced to 15%. According to Reuters, India presently levies import taxes on international electric vehicles (EVs) of 70% or 100%.

As per the recent policy of India, automakers who establish manufacturing facilities in India and invest a minimum of $500 million would have the opportunity to import up to 8,000 electric vehicles (EVs) with an annual cost of $35,000 or more, at a reduced tax rate.

For Tesla, which has been pushing for lower import levies and trying to enter the Indian market for years, the decision is positive.

According to reports, domestic automakers Maruti Suzuki, Tata Motors, and Mahindra & Mahindra have indicated their concerns earlier. 

He also said: “I wish more and more players come, with more and more choices. Because that will give consumer a chance to look at the various options and go for it. And collectively, we will also educate the customer and address the issues and certain ‘myths,’” said Chaba.

“Tesla is really welcome. It’ll be good for the industry, good news for the country, and for serious players like us.”

Elon Musk, the CEO of Tesla, has previously expressed his excitement for India’s future, saying it had “more promise than any large country in the world.”

However, Tesla could not be prioritising investments in the South Asian nation at this time.

Musk cancelled his planned visit to India this week, when he was supposed to meet with Prime Minister Narendra Modi. He gave the excuse that he had “heavy Tesla obligations” for his absence.

According to several media reports from last week, Musk was anticipated to declare a $2 billion to $3 billion investment to establish a new factory in India. According to the media, Tesla has already begun searching for dealership space in Mumbai and New Delhi.

The EV manufacturer revealed on Tuesday that its first-quarter revenue had decreased by 9%, the most since 2012. However, after Musk told investors that production of new, less expensive EV vehicles would start as early as next year, shares shot up more than 11%.

In an effort to combat declining sales and growing competition from Chinese EVs, it has also lately lowered pricing in a number of its main markets, including the US, China, and Germany.

Chaba further emphasised the possibility that India’s demand for EVs may not increase as a result of the lack of adequate infrastructure for charging EVs.

“No country can say it has arrived in terms of infrastructure, it may take 20 years for us to reach there,” he warned. “we give a good range on our electric vehicles, so customers are very, very happy, but we still have a long way to go.”

(Adapted from NewsBreak.com)