That is the question that Shri Nitin Gadkriji
must be asking himself , after reading the following news report which appeared
in New York Times , yesterday
Or , would like to ask Elon Musk , in connection with his tweets re
setting up an electric car plant in India
But Shri Gadkariji holds a TRUMP CARD ( pun intended ! )
He can tell Elon :
“ Look , to set up
a plant in China , you must have a Chinese Company as your JV partner and you
cannot hold more than 50 % equity in the JV
No such conditions in India !
On top of that , we will match all the other concessions /
amenities that the Chinese offer you
And , we will allow
to participate in the tender for 3 million EV for the Central / State
governments ( to replace the existing petrol / diesel fleet , by 2019 ) , as
long as 50 % of value addition takes place in India , under Phased
Manufacturing Program “
--------------------------------------------------------
Shri Gadkariji :
In your dream to electrify India’s 200 MILLION polluting vehicles, by 2030 , this could well be
the “ TIPPING POINT
“
------------------------------------------------------------------------------------------------
Tesla Motors is
in discussions to establish a factory in Shanghai, its first in China, a move
that could bolster its efforts in one of its major markets even as it further
lifts China’s position as a builder of electric cars.
In a statement on Thursday, Tesla said
it needed to set up more overseas factories to make cars that customers could
afford. Such a strategy is a must in China, which charges steep tariffs for
imported cars.
“Tesla is working with the Shanghai
Municipal Government to explore the possibility of establishing a manufacturing
facility in the region to serve the Chinese market,” a company spokesman said.
“Tesla is deeply committed to the Chinese market, and we continue to evaluate
potential manufacturing sites around the globe to serve the local markets.”
“While we expect most of our production to remain
in the U.S., we do need to establish local factories to ensure affordability
for the markets they serve,” the spokesman said.
China accounted for about 15 percent of
Tesla’s revenue last year, nearly double the percentage it contributed in 2015.
Shanghai city officials did not respond to requests
for comment. Bloomberg News reported earlier that
Tesla and Shanghai had signed a preliminary agreement.
Tesla’s negotiations do not guarantee
that a plant will be built. Under Chinese law, such a project would require
Tesla to find a Chinese joint-venture partner. While China is full of
Chevrolets, Fords and Volkswagens, most are made in factories jointly owned by
a foreign automaker and a local company.
The City of Shanghai controls the SAIC
Motor Corporation, one of China’s largest automakers and a partner for General
Motors and Volkswagen. It was not clear whether Tesla’s negotiations with the
city government would steer the company to negotiate with SAIC. Calls to the
Chinese automaker were not returned.
Tesla could get around the joint-venture
requirement by building a wholly owned factory in a foreign trade zone in
China. But it would still have to pay the 25 percent import duty for cars sold
in China, as the factory would be treated as outside China for trade purposes.
Further complicating matters, China recently announced that it would issue no more
business licenses to make automobiles, including electric cars. Tesla
does not have a license, although it could form an alliance with a company that
has one.
These are formidable obstacles. But some in the Chinese auto
industry say that the economics of producing in China — a low-cost supply
chain, especially for electric cars, as well as the ability to bypass the
import tariffs — make the proposition attractive.
For China, a domestic Tesla
factory could represent a big symbolic victory. Spurred by incessant pollution
and increasing dependence on foreign oil, China for the last several years has
pushed to be a leader in electric car development.
That has raised concern in
Western countries. In March, the European Union Chamber of Commerce in China
complained that Chinese
law requires manufacturers who set up shop in China to transfer crucial
technology to their Chinese partners.
The
complaint coincides with a broader debate over China’s plan — called Made in
China 2025 — to become self-sufficient in some technology industries. That plan
has led to concerns that China will nurture and subsidize domestic competitors
to Western companies.
Still, it is not clear what arrangements Tesla would make in China.
The battery is central to
electric car technology. Tesla has already invested heavily in its huge, $5 billion Nevada
factory, called the Gigafactory, to produce batteries.
23 June 2017
www.hemenparekh.in
/ blogs