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      How Challenging It Would Be For Tesla To Penetrate The Indian Market - Stocks Telegraph

      By Hasnain R

      Published on

      December 30, 2020

      11:44 AM UTC

      How Challenging It Would Be For Tesla To Penetrate The Indian Market - Stocks Telegraph

      Tesla is hitting the Indian market as the country’s authorities have announced that the Model 3 sales would open in the first quarter of 2021. The organization will open an assembly plant in the future, which would also concentrate on local demand. A matter of speculation for the industry remains the price tag for the Indian Tesla. If the Model 3 selling price is now around $30.2 thousand in California, then the same model is offered in China for $38.2 thousand, considering the fact that manufacturing is based in Shanghai. The starting price in the new market may be 5.5 million rupees, or $75 thousand, according to the Indian media. This makes the Indian Tesla immediately representative of luxury cars and decreases the number of potential sales dramatically.

      India is not yet a big luxury and business class vehicle segment, but sales are increasing faster there than in other nations. The Indian market will become the third largest of all groups (after China and the United States) and the most competitive in the luxury niche by the end of this year. A second attempt will be the arrival of Tesla in this region. Because of stringent rules, this was not possible in 2017: the legislation limits car sales with a local production share below 30 percent. If the company manages to reach India for the second time, substantial investment in the charging system would be required.

       Since recently joining the large S&P 500 index, Tesla shares are keeping steady at mid-December prices. The stock is now only at 4% of its absolute highs. Despite the smooth rise of the company’s share projections for the next year, the real stock price is already 61% higher than the analysts’ estimate, and the sector value remains abnormally high as P/E of 1319 is almost 60 times higher than the market average. Either the autumn correction or the drawdowns in December did not interrupt the uptrend in Tesla shares. The stock targets the 900 mark in the medium term, which gives growth of up to 40 percent. Given the change in global demand for undervalued stocks, however, Tesla is highly likely to display modest growth next year, not exceeding the S&P 500’s average dynamics.

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