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Is Tesla Gearing Up to Tap India's EV Market? ETFs in Focus
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Tesla (TSLA - Free Report) is considering expanding into India’s markets as it is in talks with the country’s government. The Indian government could develop new plans for the country’s electric vehicles (EV) market. India’s policy makers could slash the import tax rates for automakers that undertake a commitment to a certain level of domestic manufacturing.
According to Reuters, the change in policy could allow automakers to import completely assembled EVs into India with a much lower import tax, potentially as low as 15%. This could be a substantial decrease from the current import tax rate of 100% which is applicable to cars above $40,000 and 70% for the rest.
Investors who hold a positive outlook on the growth of Tesla and India's EV market can consider investing in the following ETFs that offer exposure to the electric car manufacture. Meet Kevin Pricing PowerETF (PP - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) and ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) are the funds that can be considered.
Effect of Policy Change
The shift in policy could result in a significant decrease in the cost of imported EVs into the country potentially opening doors for global car manufacturers to tap into the world’s third-largest car market. The Indian market presents itself as an attractive expansion destination for the global EV makers as the EV market in the country offers promising growth opportunities, with EVs constituting less than 2% of total car sales in the country.
However, a policy change may come as a challenge for the government as the decision to slash the import tax rates may disrupt the local EV market, where domestic manufacturers have already established a strong presence.
As quoted by Tesla in the Reuters article, the potential factory in India could achieve full capacity by 2030. The largest EV manufacturer in the world said that it could manufacture a new EV model which may be priced around $24,000, about 25% more affordable than its current entry model. This new model would be targeted for both the Indian domestic market and exports from India.
Growth Prospect of India’s EV Market
According to a report by Fortune Business Insights, India’s EV market is forecast to witness an outstanding CAGR of 66.52%, from 2022 to 2029. Valued at $3.21 billion in 2022, the EV market in the country is expected to touch $113.99 billion by 2029.
The EV market in the country is witnessing a notable upswing fueled by its growing population and favorable government policies. With the world’s fifth-largest economy looking to reduce its dependence on traditional energy sources and aiming to achieve net-zero carbon emissions by 2070, the government has set its sights on transitioning 70% of all cars to EVs.
Tesla Foresees Cost-Effective Manufacturing
A shift in policy would not only allow Tesla to access the untapped potential of the EV market in India and grow its operations within the country, but it would also provide the company with the chance to enhance its revenues through more cost-effective manufacturing options. This boost in revenues and a share of the expanding market could prove beneficial for Tesla.
ETFs in Focus
Meet Kevin Pricing Power ETF (PP - Free Report) – 22.24% exposure to Tesla
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) – 17.96% exposure to Tesla
Vanguard Consumer Discretionary ETF (VCR - Free Report) – 14.96% exposure to Tesla
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) – 13.96% exposure to Tesla
ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) – 12.81% exposure to Tesla
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Is Tesla Gearing Up to Tap India's EV Market? ETFs in Focus
Tesla (TSLA - Free Report) is considering expanding into India’s markets as it is in talks with the country’s government. The Indian government could develop new plans for the country’s electric vehicles (EV) market. India’s policy makers could slash the import tax rates for automakers that undertake a commitment to a certain level of domestic manufacturing.
According to Reuters, the change in policy could allow automakers to import completely assembled EVs into India with a much lower import tax, potentially as low as 15%. This could be a substantial decrease from the current import tax rate of 100% which is applicable to cars above $40,000 and 70% for the rest.
Investors who hold a positive outlook on the growth of Tesla and India's EV market can consider investing in the following ETFs that offer exposure to the electric car manufacture. Meet Kevin Pricing Power ETF (PP - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) and ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) are the funds that can be considered.
Effect of Policy Change
The shift in policy could result in a significant decrease in the cost of imported EVs into the country potentially opening doors for global car manufacturers to tap into the world’s third-largest car market. The Indian market presents itself as an attractive expansion destination for the global EV makers as the EV market in the country offers promising growth opportunities, with EVs constituting less than 2% of total car sales in the country.
However, a policy change may come as a challenge for the government as the decision to slash the import tax rates may disrupt the local EV market, where domestic manufacturers have already established a strong presence.
As quoted by Tesla in the Reuters article, the potential factory in India could achieve full capacity by 2030. The largest EV manufacturer in the world said that it could manufacture a new EV model which may be priced around $24,000, about 25% more affordable than its current entry model. This new model would be targeted for both the Indian domestic market and exports from India.
Growth Prospect of India’s EV Market
According to a report by Fortune Business Insights, India’s EV market is forecast to witness an outstanding CAGR of 66.52%, from 2022 to 2029. Valued at $3.21 billion in 2022, the EV market in the country is expected to touch $113.99 billion by 2029.
The EV market in the country is witnessing a notable upswing fueled by its growing population and favorable government policies. With the world’s fifth-largest economy looking to reduce its dependence on traditional energy sources and aiming to achieve net-zero carbon emissions by 2070, the government has set its sights on transitioning 70% of all cars to EVs.
Tesla Foresees Cost-Effective Manufacturing
A shift in policy would not only allow Tesla to access the untapped potential of the EV market in India and grow its operations within the country, but it would also provide the company with the chance to enhance its revenues through more cost-effective manufacturing options. This boost in revenues and a share of the expanding market could prove beneficial for Tesla.
ETFs in Focus
Meet Kevin Pricing Power ETF (PP - Free Report) – 22.24% exposure to Tesla
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) – 17.96% exposure to Tesla
Vanguard Consumer Discretionary ETF (VCR - Free Report) – 14.96% exposure to Tesla
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) – 13.96% exposure to Tesla
ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) – 12.81% exposure to Tesla