Indians wanting their money back for undelivered Teslas shows how drastically the EV market changed

HANOI, Vietnam (AP) — In April 2016, Elon Musk invited Indians to preorder the upcoming Tesla Model 3. Vishal Gondal was one of the first to sign up, paying a $1,000 deposit for a car that never arrived.

The founder and CEO of a health-tech startup called GOQii in India’s financial capital Mumbai, Gondal wasn’t sure when the automaker would launch in India or how much the car would eventually cost. But the Elon Musk fan was excited about the Model 3 and willing to wait.

In the eight years since Tesla’s initial promise to sell cars in India, other automakers have launched their own EVs. But the American automaker has failed to follow through, apparently because of concerns that taxes would make the cars too expensive in India, combined with the difficulties of building an Indian factory if it decided to shift production away from China.

After six years without a Tesla or a clear explanation about the company's plans for India, Gondal bought an electric SUV made by German automaker Audi. He got his $1,000 back in January 2023 with the help of a friend who helped him track down a Tesla sales manager in India.

India is the world's third-largest auto market after China and the United States. But it's unique. The average price of cars sold in India in 2023 was $14,000, compared with $47,000 in the United States. An American can buy a new Tesla 3 for about $40,000. That's the price of a luxury car in India, and buyers would demand excellent after-sales service.

“I think Tesla may be a great tech company. But they just don’t know how to sell luxury cars,” Gondal said.

Since then, other automakers who have been selling luxury cars in India have also started selling EVs. Hemant Suthar, a Mumbai-based director of a design studio who had also prebooked a Tesla in 2016 before finally getting his money back in 2023, said that he didn’t think the minimalistic Tesla could compete with some of the more luxurious EVs now on Indian roads.

To woo automakers like Tesla while also protecting domestic carmakers like Mahindra and Maruti Suzuki, India reduced its import duties to 15% from 70%-100% in March 2024 for EVs cheaper than $35,000 — as long the automaker commits to building a factory in the country within three years.

Despite his earlier enthusiasm, in 2019 Musk expressed concern that import duties could double prices of Teslas made in India, making them “unaffordable.” Many in India expected Musk to announce plans for a factory there in April, but he canceled an expected trip at the last minute, citing “very heavy Tesla obligations.”

Tesla didn't respond to an emailed request for comment.

The EV market has changed drastically in India and elsewhere in the past five years and Tesla's own position has evolved since it built giant factories in China, Germany and the U.S. Sales are slowing and its only new product, the Cybertruck EV, lacks much of a market outside the U.S., so global sales have fallen year over year for two straight quarters.

According to a filing to the U.S. Securities and Exchange Commission, it can build 2.3 million cars annually. Production in 2023 grew by 35% to 1.85 million cars. In the first half of 2024, Tesla sold 831,000 vehicles worldwide, far short of the more than 1.8 million for the full year that Musk had forecast.

The novelty of EVs has been wearing off, said Tu Le, founder of the consultancy Sino Auto Insights.

“What was a huge opportunity five years ago is now almost a weight around their neck,” he said.

To keep a leading position among global automakers, Tesla needs new, more affordable cars for emerging markets like India, Tu said. Even a car priced at $25,000 is not competitive in China given the dominance of Chinese EV makers like BYD. They're expanding overseas with both cheap and premium cars, wiping out Tesla's first-mover advantage in a place like India.

“Every market they (Tesla) enter from now on, BYD is going to be looking at their watch and saying: What took you so long?” Tu said.

India's growing auto market is dominated by its largest carmaker Maruti Suzuki, followed by South Korea's Hyundai Motors and India's Tata Motors. Electric vehicle sales doubled in 2023 but still made up just 2% of total car sales, according to market research firm Counterpoint Research. Of this, Tata Motors held more than two-thirds of the market, with Indian automaker Mahindra & Mahindra and China's BYD shares growing.

BYD started making batteries in India in 2008. It was one of the top five EV brands in India in 2023 despite selling only two models — the six-seater e6 MPV and the Atto 3 SUV, Counterpoint said. It launched the BYD Seal in India in March 2024.

Many in India, a relatively small and crowded EV market, are skeptical about EVs. Ishan Raghav, the managing editor of the Indian car magazine autoX, said that to win over customers with an affordable EV for mass sales, Tesla would need to price its cars at a “sweet spot” of roughly $30,000.

“The only way to do that is if they build that car in India,” he said.

India says it does not restrict imports of Chinese EVs. But ties between China and India deteriorated after a military clash in July 2020, Raghav noted, and protections for domestic automakers will create other obstacles.

Even if Tesla were to sell cars in India after agreeing to build a factory within three years, most imported Teslas would sell for what luxury cars made by established players like Mercedes Benz and Audi cost. Those automakers have been in India for decades and already have extensive dealership and service networks.

Tesla has sold cars directly to American customers, but dealerships play a vital role in enticing customers with a luxury experience, said Matthew Degen of Cox Automotive, an American car research company.

“You go into an actual location, you meet with people, there are nice lounges. Now Tesla has showrooms, but that is different from dealerships,” he said.

Tesla also would also have to build a charging network in India, given the relatively small number of EVs already in the market.

Musk said in a July earnings conference call that Tesla is boosting capacity at its factories and that its affordable car — a small model expected to cost around $25,000 using new generation vehicle underpinnings and some features of current Tesla models — was “on track” for delivery in the first half of 2025.

The company's plans for India remain unclear.

Rajesh Kumar Singh, a federal bureaucrat who heads the Indian agency for promoting industrial growth, said in a TV interview that the Tesla executive who Indian officials had been talking with “got fired” and that India didn’t know what the company intended to do.

“We really don’t know,” he said.

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Hemant Suthar stands for a photograph beside his car in Mumbai, India, Friday, July 26, 2024. (AP Photo/Rajanish Kakade)

Hemant Suthar sits for a photograph at his residence in Mumbai, India, Friday, July 26, 2024. (AP Photo/Rajanish Kakade)

Electric Vehicle charging stations are seen a residential building parking area in Mumbai, India, July 26, 2024. (AP Photo/Rajanish Kakade)

A car gets charged at an Electric Vehicle charging station at a residential building parking area in Mumbai, India, July 23, 2024. (AP Photo/Rajanish Kakade)

A car gets charged at the Electric Vehicle charging station at a residential building parking area in Mumbai, India, July 23, 2024. (AP Photo/Rajanish Kakade)

Electric Vehicle charging stations are seen a residential building parking area in Mumbai, India, July 26, 2024. (AP Photo/Rajanish Kakade)

ST. LOUIS (AP) — Yasmani Grandal homered, Nick Gonzales drove in the winning run with a single in the eighth inning, and the Pittsburgh Pirates beat the St. Louis Cardinals 3-2 on Thursday night to snap a three-game losing streak.

Pirates starter Luis Ortiz allowed two runs on five hits and had seven strikeouts in six innings.

“My whole focus today was to get weak contact, and the strikeouts showed up,” Ortiz said via an interpreter. “That was not in my mind to strike people out, but making quality pitches, that’s what happened and we’re pretty happy.”

Carmen Mlodzinski (4-5) and Dennis Santana each tossed a scoreless inning, and Aroldis Chapman pitched the ninth to earn his 10th save in 15 chances. It was Chapman's 331st career save moving him past John Wetteland for the 16th most in major league history.

“He's had a heck of a career,” Pirates manager Derek Shelton said. “He's making a very strong case to be a Hall of Famer. He's the all-time left-handed leader as a reliever in strikeouts. This guy just continues to get better with age. He's very impressive.”

Cardinals starter Erick Fedde allowed one run on four hits and struck out three.

“There's still some room to improve on my movement," Fedde said. ”I felt like things were really late today just in the sense of kind of the swings I was getting. They seemed a little more defensive than they have been, and to that means my stuff's going to be late and a little harder to see. That's a great sign."

St. Louis (77-76) fell to eight games behind the New York Mets (85-68) in the National League wild-card race, and will be mathematically eliminated from postseason contention with either one more loss or a Mets win.

Gonzales singled up the middle off Ryan Fernandez who entered the game after JoJo Romero (7-3) walked pinch hitter Connor Joe with two outs in the top of the eighth.

“Someone told me about how DJ Lemahieu kind of takes every AB the same, how it's the most important AB no matter what the count, no matter what the situation,” Gonzales said. “I just try to do that the best that I can so every single at-bat I have kind of feels the same. Obviously, emotions get going, but I'm just trying my best to just make every single AB as important as the next and trying to lock in and not trying to do too much.”

Grandal hit his eighth home run of the season to right field in the seventh inning to tie the game 2-2.

Brendan Donovan hit an RBI single to left in the fourth inning to tie the game 1-1, then drove in another run with a double to the left-center field gap in the sixth inning to give the Cardinals a 2-1 lead. He now has a hit in all 18 home games he has played against Pittsburgh to start his career.

Gonzales lined a triple to right field that Jordan Walker had trouble corralling and scored on Bryan De La Cruz’s sacrifice fly to give Pittsburgh a 1-0 lead in the fourth inning.

TRANSACTION

Pittsburgh purchased the contract of RHP Isaac Mattson from Triple-A Indianapolis. Mattson has not appeared in a major league game since pitching for Baltimore on Oct. 1, 2021, in Toronto. RHP Jake Woodford was designated for assignment.

TRAINER’S ROOM

Pirates: C Endy Rodríguez (right elbow surgery) batted third as the designated hitter for Indianapolis in a rehab appearance at St. Paul.

UP NEXT

Pirates: RHP Mitch Keller (11-10, 3.87 ERA) is scheduled to face Reds RHP Nick Martinez (9-6, 3.37 ERA) in the opener of a three-game series in Cincinnati on Friday night.

Cardinals: RHP Kyle Gibson (8-7, 4.11 ERA) will oppose Guardians RHP Ben Lively (12-9, 3.87 ERA) in the opener of St. Louis’ final home series of the season on Friday night.

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AP MLB: https://apnews.com/hub/mlb

St. Louis Cardinals' Brendan Donovan runs on his RBI single during the fourth inning of a baseball game against the Pittsburgh Pirates, Thursday, Sept. 19, 2024, in St. Louis. (AP Photo/Scott Kane)

St. Louis Cardinals' Paul Goldschmidt, center, is congratulated by teammates after scoring during the fourth inning of a baseball game against the Pittsburgh Pirates, Thursday, Sept. 19, 2024, in St. Louis. (AP Photo/Scott Kane)

St. Louis Cardinals' Brendan Donovan, foreground, looks toward the dugout after hitting an RBI double during the sixth inning of a baseball game against the Pittsburgh Pirates, Thursday, Sept. 19, 2024, in St. Louis. (AP Photo/Scott Kane)

St. Louis Cardinals' Brendan Donovan hits an RBI double during the sixth inning of a baseball game against the Pittsburgh Pirates, Thursday, Sept. 19, 2024, in St. Louis. (AP Photo/Scott Kane)

Pittsburgh Pirates' Oneil Cruz sits on first base as he waits for a St. Louis Cardinals pitching change to be completed during the eighth inning of a baseball game Thursday, Sept. 19, 2024, in St. Louis. (AP Photo/Scott Kane)

Pittsburgh Pirates' Connor Joe hits a single during the eighth inning of a baseball game against the St. Louis Cardinals, Thursday, Sept. 19, 2024, in St. Louis. (AP Photo/Scott Kane)

Pittsburgh Pirates' Nick Gonzales hits an RBI single during the eighth inning of a baseball game against the St. Louis Cardinals, Thursday, Sept. 19, 2024, in St. Louis. (AP Photo/Scott Kane)

Pittsburgh Pirates' Yasmani Grandal, left, is congratulated by third base coach Mike Rabelo, right, as he runs the bases after hitting a solo home run during the seventh inning against the St. Louis Cardinals, Thursday, Sept. 19, 2024, in St. Louis. (AP Photo/Scott Kane)