TESLA - THE HEARTBEAT OF ELECTRIC CARS

By Research Desk
about 4 years ago

 By Ruma Dubey

When the Ford Mustang was revealed way back in 1964 in the USA, there were serpentine queues to book the car. And 52 years later, we see the same but much longer queues for Tesla’s path breaking Model 3.

Tesla is like an aspirational car. It is so expensive that only the very rich or the wannabes’ who borrow to buy can afford this brand. The CEO of Tesla, Elon Musk has become something like a rock star. Everyone around the world now know him or about him. Something like what Ratan Tata did when he announced plans for a Tata Nano, Musk on 31st March announced that Tesla will be launching its electric car – nothing new about that as it is a “green car” company. But the difference this time – it is being priced at an affordable starting price of $35,000. Now that’s a steal for a Tesla!

Known as Model 3, this will be a sedan, can seat 5 and can go up to 215 miles on a charge and 0-60 mph in less than 6 seconds.  Naturally, people were ecstatic and wanted to rush in to book the car which will be ready for delivery by December 2017. First-come-first serve was the mode so that explains the long serpentine queue. Within two days, some 276,000 people had paid the deposit of $1000 and by the end of the week, some 4,00,000.  Elon Musk sent out gifts to the first early depositors, a token of appreciation for their faith in him.

To bring the magnanimity into perspective – since its existence, Tesla has totally shipped about 1,10,00 cars and this new model alone has clocked in orders for 4 lakh cars. Tesla has struggled with meeting order backlogs and we cannot help but wonder how it will ramp up and meet the deadline of 2017 which many say will extend into 2018.

When Ratan Tata announced the small car Nano, it shook up the automobile industry world over. Everyone, right from Nissan, Hyundai, Honda all wanted to bring in their small car and worked on making it as affordable as possible. Similarly, we wonder if this affordable electric car from Tesla will forever change the electric vehicle (EV) market around the world.  Or is this just America’s fascination for one of its brand and a very brash CEO making tall claims?

Well, looking at the orders which Tesla has received, obviously Musk knows what he is doing. There is a demand but not for EVs as such because there are other cars – Nissan, BMW, Chevrolet, Hyundai; they all already offer EVs at almost similar price tags. So more than EVs, the fascination here is for Tesla – a rich man’s brand, that sense of aspirational ownership. It’s like an Apple v/s Samsung.

For the EV cars to take off the infrastructure first needs to be there, which even in the developed countries is lacking. The batteries need to be plugged in to charge and such facilities are not yet available at all the pumps. The change in technology is that earlier batteries used to take 24 hours or even more to charge but now it has come down to half hour. But the fact still remains that if driving out of the city, there is always the fear of running out of charge and within the city, one cannot drive into a station and get recharged in a jiffy.

In the international market, the EV cars on offer are Bolt, Leaf, i3 and the soon-ready-to-launch Hyundai Ioniq. In India, we currently have only one home grown EV – the Reva. This now belongs to Mahindra and it is sure to be watching this EV with great scrutiny. If Tesla’s Model 3 takes off as promised and it delivers on the promise, the pressure will be there to deliver more Reva’s in India. Currently, the Reva, now rechristened as E20 is a small, two-door car. The company recently received an order for 1250 cars from a clutch of start-ups, to be delivered in the next 12 months. The E2O can seat four people and offers a range of up to 80 kilometres in a single charge of five hours. Last fiscal, FY16, Mahindra sold 1000 E20s – sales is low for the same reasons world wide - initial high cost of acquisition, high maintenance costs, lack of charging infrastructure and a limited battery range.

The government’s National Electric Mobility Mission Plan (NEMMP) intends to put seven million electric and hybrid vehicles on the road by 2020. It also introduced a subsidy – buyers get a one-third price off on the retail cost, which is the difference between the price of the EV vehicle and comparable petrol model.

2018 could be a year when EVs could take off. And that is a move which we Indians, living in some of the most polluted cities in the world, should ideally look forward to. Maybe work on putting in place charging stations should begin now in anticipation?

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