VinFast vs Tesla: India's EV market turns into global battleground

With Chinese EVs facing global roadblocks and Southeast Asia caught in a geopolitical tangle, global automakers are turning their gaze to India.

The nation offers a massive consumer base and a developing EV ecosystem. But can new entrants crack the code? The Federal speaks with Ravi Bhatia, President of JATO Dynamics, to unpack why India is both alluring and elusive for the global EV giants—and what lessons history holds for their future. Gurugram-based JATO offers automotive data, analysis, and intelligence to global players.

With Chinese EVs facing US tariffs and Southeast Asia caught in a strategic crossfire, India is now seen as a neutral ground with a strong domestic market and improving infrastructure. Vietnamese player VinFast is bullish while Tesla is cautious. What strategic misreads are influencing these global players' India bets?

EV makers like Tesla and VinFast see India’s billion-plus population and evolving infrastructure as an untapped goldmine, especially as Chinese EVs face resistance in the West. But they often underestimate the strength of local OEMs.

Players like Tata Motors, Mahindra, Maruti Suzuki, and MG have a deep understanding of Indian consumers, who have distinct preferences. For Indians, a car is often the second-largest purchase (after a house). They seek flexibility, not restrictions. The idea of EVs—limited range, charging friction, and high upfront cost—clashes with that need for freedom.

Many charging stations don’t work, or their status isn’t reliably updated. The gap between the total addressable market and the actual serviceable market is what trips up these international players.

There are conflicting reports about charging infrastructure. For instance, the South reportedly has one charger per 150 EVs, while in the North, it’s closer to one per 235. And on that note, what did companies like Ford miss that Maruti Suzuki got right?

The problem isn’t just charger density; it's reliability. Petrol pumps are everywhere, and your phone easily finds them. But with EVs, you rely on six or seven different apps—many of which don’t confirm whether the charger is working, occupied, or charging at peak rates.

As for American automakers, the issue was product-market fit. They often misread the segment size, the ability to pay, and the need for localized design. Ford and others didn’t fully grasp the implications of India’s unique regulations, like the four-meter rule, which allows tax benefits for compact cars.

Engineering a new product to meet that rule was expensive. Many foreign companies entered a vicious cycle—failed first launches led to reduced investments, smaller risk appetites, and eventual exits. Daewoo, for example, initially succeeded but collapsed due to support failures. American firms never even reached that level of affection.

Can you explain the four-metre rule? Also, when Indian EV buyers approach a purchase, is it aspirational like the iPhone, or value-driven?

The four-metre rule offers lower tax rates for cars under four metres in length, incentivising compact design. Foreign OEMs struggled to meet this regulation economically.

As for EV buyers, battery costs alone make the vehicles expensive, even without added features. To justify that price, OEMs load up on tech—screens, safety features, sensors—which further raises costs.

So EVs do have an aspirational appeal, but unless they offer real value, that aspiration doesn’t convert to sales. Tata, Mahindra, and MG understood this early. Tesla’s India model is priced closer to BMW and Audi, so it should be evaluated in that premium segment—not compared with a Tata Punch.

With EVs gaining traction and direct-to-customer models rising, is the traditional dealership network facing extinction or reinvention?

Dealerships aren’t going anywhere. From a customer’s lens, the journey starts online—with searches, influencer videos, blogs. But by the time they enter a showroom, they’re looking for clarity, not information.

A good dealer offers product knowledge, trust, and post-sale support—registration, documentation, servicing. Even with D2C models, the vehicle is delivered by dealers. Two-wheeler dealers are already using platforms like Amazon as marketing channels, but the last mile is still dealer-driven.

In short, the channel is evolving, not collapsing.

You’ve worked with both Maruti Suzuki and Fiat. How early can you tell if a new vehicle is working, based on data? And are we seeing similar patterns in the EV space now?

Yes. Today, buzz begins well before a vehicle hits showrooms. Influencers generate videos, blogs highlight features, social media carries the chatter. Website visits, form submissions, lead responsiveness—all form a marketing funnel that OEMs monitor closely.

Mass-market brands like Tata and Mahindra often see thousands of pre-bookings because of their brand trust. But new players with no local fanbase must work harder. Niche players seek passionate early adopters, while mass-market players offer broad safety and trust.

You mentioned pricing being crucial. EV makers seem to be targeting the ₹20–40 lakh segment, once seen as a no-man’s land. What does JATO data say about that mid-premium space?

The core of India’s car market is the ₹9–10.3 lakh segment. Above that, the pyramid narrows. The ₹20–30 lakh segment has lower volumes but higher margins, which is why many OEMs are targeting it.

But customers at those levels are experienced—they expect features that distinguish their purchase. They're not first-time buyers. They’ve been through the Maruti journey. That’s why selling a ₹25 lakh Maruti is harder than selling a ₹25 lakh BMW.

There's a belief that today’s buyers are EMI-focused—they’ll buy if the monthly installment looks manageable. Does this shift affect how cars are sold?

The EMI mindset works differently for cars than for phones. A car comes with ongoing costs—charging, insurance, maintenance, and tyre replacement. It’s not like an iPhone.

So while affordability matters, buyers are also factoring in the total cost of ownership (TCO). An EMI of ₹20,000 may seem manageable, but add insurance, premium charging, breakdown coverage—and the picture changes. The 70% loan-driven market still evaluates these total costs seriously.

Despite deep pockets, big American players like Ford and GM exited India. Yet Maruti, through localisation, became dominant. Looking ahead, can India become a global export hub like China or Japan?

Car exports differ from phones. Phones are compact and easy to ship worldwide. Cars require larger logistics and need significant justification—either cost advantage or unmatched quality.

India can succeed in specific export markets. Maruti has already done well in South Africa and other developing regions, thanks to its low-cost models. But we won’t become the next China or Japan.

But brands like Bajaj seem to be doing well abroad—especially in Latin America and Southeast Asia. Are we underestimating India’s export story?

There are a few breakout markets, yes. But export success requires detailed study. Companies can't just ship a few bikes everywhere and hope for the best. They must analyse local demand, price points, feature preferences, and configuration trends.

At JATO, we work closely with OEMs to provide this market intelligence. For example, if an EV brand wants to launch in the UK under the FTA, we provide insights on UK pricing, buyer behavior, and whether the market prefers standard or optional configurations.

What are your closing thoughts on India’s automotive and EV trajectory?

India will remain a promising and growing market. Whether we grow at 4%, 5%, or 8%, the direction is upward. The Indian buyer is both aspirational and wealthier now, and we’re seeing a trend where first-time buyers are moving toward used cars as new ones become more expensive.

The arrival of VinFast, Tesla, and BYD is exciting. They bring new technology. But it’s up to Indian OEMs to learn fast and compete harder. The future’s bright—if we can navigate the learning curve.

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