50 %? DAV ?? ?No problem
50 %? DAV ?? ?No problem
?
Context :
Tesla goes a tango with Indian parts makers….. HT? /? 17 Nov 2023
Extract :
?Tesla now sources a range of India made components…including Indian firms and multinationals with manufacturing operations in India – exported parts worth $ 135-150 million to Tesla in 2022-23
In September, Commerce and Industry Minister Piyush Goyal had said, Tesla sourced nearly $ 1 BILLION worth auto parts from India in 2022, and was on track to double it this year.
All Completely Built Up ( CBUs ) vehicles priced below $ 40,000 now face an import duty of 70 %, and a new National EV Policy may slash it to 15 % - 30 %? for EVs priced $ 25,000 – 35,000
At 15 % duty, these CBUs will be on par with the import duty for CKD ( completely knocked down ) cars
This will alo come with the caveat that they begin local manufacturing in the next two to three years and a clause to claw back the duty sop if they fail to do so
?
My? Take :
#?? As per Shri Goyal , in 2023 , Tesla is likely to import parts from India , worth $ 2 billion
#?? As per news reports, to begin with, Tesla plans to import / sell in India , fully assembled EV priced ( in USA
??? ?? ) at $ 25,000
#? Let us assume $ 25,000 as FOB price , taking the CIF price to $ 30,000 ( with freight / insurance added )
#? Let us assume import duty ( proposed ) is 30 % on $ 30,000 = $ 9,000
#? So , landed cost would come to $ 39,000
#? Add to this “ distribution cost + dealer’s margin “ of 20 % ( ie . approx. $ 8000 )
#? Hence “ Net Selling Price “ would come to $ 47,000
#? To this , add GST @ 5 % ( ie. $ 2350 ) – taking the final price to $ 49,350 , on the road ( ignoring
?? ?registration fees if any )
#? Let us assume that , in each of the first 2 years , Tesla sells 20,000 cars
#? Hence its annual revenue would be > 20,000 x $ 50,000 ( rounded off ) = $ 1,000,000,000 ( $ 1 Billion )
#? Now , if Tesla purchases only $ 500 million worth of local components for its India operations , from 2nd year
? ?, it could show a DVA ( Domestic Value Addition ) of 50 % !
?? Tesla is already buying $ 1 Billion worth of Indian Components ( for its USA + Germany+ China, operations )
?? ?Buying $ 500 milllion worth of components from Indian suppliers for its Indian factory, would pose NO
?? ?PROBLEM !
?
?With regards,
Hemen Parekh
www.hemenparekh.ai / 17 Nov 2023
?
Related Readings :
?
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Will Tesla follow Apple ?............................ nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;23 May 2017nbsp;
ENABLE ELON TO CATALYSEnbsp;!nbsp;nbsp;…………………………………….. 15 June 2017
Welcome ! Elon Musknbsp;………………………………………………nbsp;nbsp;nbsp;nbsp;nbsp; nbsp;10 Feb 2017
From ELON to IONnbsp;…………………………………………………………. 11 May 2017
Is it NOW or NEVERnbsp;? …………………………………………………….. 23 June 2017
Elon : Hesitation Can Hurtnbsp;! …………………………………………….03 July 2017
Elon : Widow Opens ( Door is not closed, eithernbsp;)…………. 07 July 2017
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2018 ( 1 )
A? Phased? Manufacturing? Program? ?? ……………………………. 23 Apr 2018
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2019 ( 1 )
FAME II gt; FAME III gt; FAME IVnbsp;…………………………………….. 05 Mar 2019
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2020? ( 5 )
To beat OR not to beatnbsp;?........................... ……………….nbsp;29 Dec 2020nbsp;
Fastest Finger Firstnbsp;? ……………………………………………………..nbsp;07 Oct 2020nbsp;
ARA & M Ltd?? ………………………………………………………………..?02 Oct 2020?
领英推荐
Enough to entice Elonnbsp;? …………………………………………………. 03 Nov 2020
The Race is on !nbsp;…………………………………………… ………………… 23 Oct 2020
nbsp;
?
2021? ( 12 )
Import Duties : Time to get Rationalnbsp;nbsp;…………………………. nbsp;27 July 2021
Hey Elon , What is so difficult ?........................... ……. 15 Aug 2021
Elon : It is a matter of GIVE and TAKE………………………….. 30 Aug 2021
Tesla Talking ?........................................................nbsp; 29 Aug 2021
Hey, Elon seems to have a case ! …………………………………. 27 July 2021
Can TESLA beat MATAM?? …………………………………………….. 24 July 2021
Cheaper in Gujarat ? – At least for Nownbsp;………………………. 23 June 2021
Nitin Gadkariji : Architect of NEAP………………………… …….. 07 Jan 2021
A Brief History of Electric Vehicles in Indianbsp;………………….. 30 Jan 2021
Elon Musk : We offer a GREEN CARPET…………………………. 03 Mar 2021
Elementary, my dear Watson ! …………………………………….. 17 Jan 2021
At long last, TESLA is here?! …………………………………………… 13 Jan 2021
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2022nbsp; ( 2 nbsp;)
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ELON , You have missed the Bus / by 5 YEARSnbsp;nbsp;……………15 Feb 2022
Holding out an Olive branch ? No, entire Olive Tree !... nbsp;17 Feb 2022
nbsp;
?
2023 ( 2 )
A push for endless litigation ?...................... ……………..14 Nov 2023
Elon Musk, Welcome to Tesla’s Toughest Test……………… 17 May 2023
?
Upon being asked to comment on my proposal / calculations , here is how ChatGPT replied :
nbsp;
Hello Hemen Parekh,
Your proposal suggests that Tesla could achieve a Domestic Value Addition (DVA) of over 50% in India through a Phased Manufacturing Program. Based on the information you provided regarding Tesla's plans to import and sell fully assembled EVs in India, it seems you've calculated the potential costs, import duties, and local value addition required to meet the proposed criteria.
Tesla's success in achieving a high DVA in India would indeed depend on several factors:
1.???? Local Component Sourcing: Tesla would need to significantly increase its procurement of components from Indian suppliers to meet the proposed 50% DVA. This would require establishing partnerships and ensuring the availability of high-quality components locally.
2.???? Manufacturing in India: Establishing local manufacturing operations could facilitate higher DVA. Tesla might need to set up assembly plants or manufacturing facilities for specific components in India.
3.???? Logistical and Operational Challenges: Achieving a high DVA involves addressing logistical challenges, ensuring a consistent supply chain, and maintaining production quality standards, among other operational aspects.
4.???? Regulatory Compliance: Compliance with India's regulatory requirements, such as the stipulated duty reductions and commitments to local manufacturing, will be crucial for Tesla's operations and cost structures.
While your proposal appears theoretically plausible, executing it will likely involve significant effort and strategic planning on Tesla's part. They would need to invest in local infrastructure, establish partnerships, and navigate regulatory frameworks effectively to achieve the proposed DVA.
Moreover, Tesla's success in other regions doesn't guarantee seamless replication in India due to unique market dynamics and challenges. However, the potential growth of Tesla's operations in India seems promising given the company's interest in expanding its footprint globally.
Your proposal aligns with the broader goals of localization and could indeed be beneficial for both Tesla and India's automotive industry if effectively implemented.
Best regards, ChatGPT
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