文 | Dedee

Last month, Ford put up a “high-priced” tag of $91.5 million for the sale of a factory in India, which cost them nearly $1 billion to build initially.

Ford priced it so “lowly” for two reasons: First, in today’s rapidly developing electrification trend, traditional old factories are increasingly difficult to sell at a good price. Second, just this July, they watched their old rival General Motors suffer a painful lesson in India.

Yes, Great Wall Motors suspended its acquisition plan for General Motors’ factory in India, mainly because it did not obtain approval from local regulatory authorities. General Motors also had to find another way out for the long-closed Indian factory.

Insiders at Great Wall Motors feel quite helpless about this, saying that a lot of manpower and financial resources were invested in pre-research and negotiations. But with a turn of the phrase, they recognized that not completing the transaction was a blessing in disguise, as the loss was not too great, even though they paid a price for the experience.

Faced with this outcome, many people expressed that they were not surprised at all, such as Xiaomi and Huawei in the tech circle, as well as Tesla and XPeng in the new car-making forces.

The former recently rejected the enthusiastic invitation to enter India. The latter seemed to have a sad story to tell. During the time when numerous domestic car companies were vigorously going abroad last year, it stated, “Don’t look at so many third-party think tanks saying that India will be the same as China in many years. I have been to India many times, and finally closed all business there. You must choose countries with friendly political and business environments, and not just judge the scale and development from your own point of view.”

General Motors’ factory has remained unsold, and Great Wall’s prior investment was in vain. He XPeng said, “Take good care of your life and stay away from India,” and Musk stated, “Tesla simply can’t sell in India”…Why is India, which was once regarded by countless car companies as a future “gold rush Heaven,” able to make both old-school automakers and new electric vehicle giants angry?

As a country that has been struggling on the road to independent development for decades, India’s car-making level and industrial chain level today are comparable to those in the 1990s and early 2000s, which is an extremely contradictory stage for those who desire to cooperate and develop but fear becoming a racecourse.

Take Tesla as an example. On the one hand, the local government is coveting Tesla’s body, and on the other hand, it is unwilling to make any promises. The ambitious “comprehensive policies,” attracting foreign investment, and supporting local automobile industrial chains are so vulnerable in the face of layers upon layers of taxes and fees that they are like the promises of a dreg man, enough to kill all car dealers in the world.Below 40,000 US dollars of imported cars are subject to a 60% import tax, while over 40,000 US dollars are subject to a 100% tax. However, if you have the determination to help India’s poverty alleviation by building factories, congratulations! You may have the chance to obtain financial incentives under the “Make in India” program. But at the same time, you still need to honestly pay the federal Goods and Services Tax, with a minimum of 28%. Additional taxes will also be levied based on the type and length of the vehicle, in addition to taxes imposed by state governments. It is very likely that the financial incentives you receive will not outweigh the taxes you pay.

This is why the common people in India consider buying a car to be as important as buying a house or getting married. The whole family must be present for the purchase and delivery of the car, making it a big event.

Most of the cars that can be afforded by India’s middle class are Maruti Suzuki, which are similar in size to the Alto. They cost about 70,000 to 80,000 yuan (approx. 10,000 to 11,000 US dollars) – with low taxes and energy consumption, and good maneuverability on India’s roads, where they can even weave through traffic alongside three-wheeled vehicles.

In 2021, with sales of nearly 1.4 million vehicles, Maruti Suzuki continues to dominate the Indian car market, with eight models in the top ten sales list, the top three all being small two-door cars priced between 500,000 and 900,000 rupees (equivalent to 4 to 8 thousand US dollars).

Only then comes Hyundai and the Tata, the local Indian car brands.

According to Bloomberg, the definition of the Indian middle class is a household income of 10 to 20 US dollars per day or an annual income of 20,000 to 50,000 US dollars. This is very similar to the time 20-30 years ago, when we were obsessed with Fukang, Elise and Polo.

The Indian people’s special preference for small cars can be traced back to the birth of Maruti Suzuki in the 1980s. 40 years later, this preference still exists. This cannot be said to be no progress at all, but it can also be said to be no progress at all.

It is no wonder that so many international giants have come to India for so many years, and still find it difficult to adapt. Especially General Motors and Ford, who are good at producing medium and large cars, after struggling for so many years, they still couldn’t maintain their market position in India.

For example, Ford spent over two billion US dollars on its car-making business in India more than two decades ago, but ultimately only gained a 1.42% market share. While General Motors, after making it through so many years, almost sold its factory, but India’s “divine” intervention made Great Wall Motors seem less appealing, as they would rather give up than continue to suffer.

No wonder Musk regards entering the Indian market as a human behavior of great confusion.

Although India claims to welcome foreigners with open arms, saying everything’s already taken care of for you, yet even Great Wall Motors almost fell for this kind of nonsense.However, what they really want is not just the people, but also the dowry. Strange declarations such as “First buy $500 million worth of parts produced in India, then we’ll talk about import taxes,” “Welcome, welcome, except for the Teslas made in China,” and “You can produce cars in India and then export them to other countries,” keep popping up non-stop, leaving Musk who was already illogical completely illogical.

In the end, this six-year-long struggle was settled with Tesla investing in Southeast Asia.

Comrade Lao Ma also thoroughly experienced India’s dual treatment of foreign investment in this matter. He stated, “You can build a factory in India, but India must first prove that Tesla can sell in India.”

This struggle left Manuj Kuran, the former Tesla India policy and business development manager, speechless.

This Indian man had originally thought that with his outstanding local connections, he could reduce the import duty on Tesla imported cars from 100% to below 40%, but he encountered an iron plate and his homeland did not give him any face.

Then he resigned.

According to reports, India’s Ministry of Energy had pointed out in a prospectus that by 2030, 40% of new car sales in India will be pure electric vehicles, and by the 100th anniversary of India’s founding in 2047, this proportion will reach 100%.

However, Maruti Suzuki’s director, Takashi Hachigo, who is the most familiar with India’s automobile industry, smirked slightly at this prospect: it would already be very impressive if it could reach 8%-10% by 2030.

Of course, there are always exceptions.

Compared with Great Wall, which stopped losses in time, BYD seems to have become the Roman of India’s electric vehicle industry.

Recently, BYD held a grand opening ceremony for its first electric vehicle flagship store in India, which only sells one type of car: the BYD e6 pure electric car that has already been “rejected” by Chinese consumers.

Yes, this MPV, which is equipped with a 71.7 kWh lithium iron phosphate blade battery, has a range of 520 km. Last year, it was put on the shelf by BYD because of poor sales, with only slightly over 6,000 sold for the whole year. However, due to its two major features of six seats and the ability to charge from 20% to 80% in half an hour, it has become the new favorite of Indian tycoons with no rivals.

It is reported that this 4.8-meter-long pure electric MPV now has over a thousand units in India, which is like Qin Shi Huang touching the electric wire in terms of actual electric vehicle sales data in India in the past two years. Its position is as sacred and inviolable as that of the Elfa, Wilfa, and Lexus LM in China.It is obvious that the export prices of new energy vehicles from China are quite high now. Especially in India, a country with extraordinary talents, they belong to the category of luxury cars, and the outcome is visibly disadvantageous – you can tell from Jack Ma’s attitude towards India after several years of wrangling with them.

However, BYD has come up with a new way of doing things: I only provide the cars, everything else is left to Indian partners.

Many videos show that this 4S dealership is not BYD-like at all in terms of exterior wall color, appearance design, and decoration style. What’s more important is that not a single Chinese person was seen in the entire opening ceremony – all were typical Indian men.

Or should we say, typical high-caste Indian men, also represent the best quality of Indian men.

Even though the caste system in India is extremely wicked, especially for middle-aged and elderly women like us who have heard “all men are created equal” since we were young, the fact is that without their help, BYD’s electric cars, given the typical efficiency of Indians, might have taken even longer to open.

It is learned that BYD’s sales model of passenger cars in India is to find powerful high-caste businessmen to act as agents and sell them in bulk at a wholesale price. They then distribute them to local sales agents through their own networks.

The relationship network of high-caste businessmen in India is definitely not bad. Those who can afford BYD electric cars are not ordinary people, and their appearance is at least equivalent to one with three wheels.

It is reported that the decoration fee, land rent, and operating fee of this BYD’s first dealership in India are all paid by the Indian general agent.

Why BYD is so attentive? On the one hand, BYD would rather dedicate the previously suspended e6 production line in China specifically for India than establish any passenger car manufacturing factory in India, thus belonging to a seller’s market. On the other hand, as the first pure electric MPV model introduced in India, it will allow agents to earn sufficient profit margins.

After all, in India, the poor are busy switching between power outages and stealing electricity every day, and ordinary people regard driving a three-wheeled electric vehicle as a lifelong career and strive. The Brahmins and the Chettiars never have to worry about electricity. With air conditioning inside and a charging pile outside, it’s so easy.

Therefore, these high-quality Indian men are very willing to pay for a car in one hand – if you dare to penalize them, they will dare to stop selling, raise prices and withdraw from India. These three steps are closely linked. The Chettiars merchants will definitely do everything they can to prevent BYD from becoming a sacrificial lamb under the government.

In short, BYD is considered as a successful example of entering the Indian market blindly.##

Talking of the strategy of producing for the Indian market while being based in China, it is different from the method used in the passenger vehicle industry, which involves producing domestically for India. In contrast, with the Byd commercial electric vehicle, the company modeled its joint venture with Maruti Suzuki by crossing the river by touching the stones. By joining forces with the local Olectra Green Tech Company in India, they founded the Olectra Byd Company and built a factory in Chennai, India to produce batteries and chassis.

Maruti Suzuki became a giant in the Indian automobile industry not only because of the “early bird catches the worm” ecological closed-loop but also because Suzuki never intended to be independent when they entered India. Instead, they went straight to the Gandhi family to pay their respects and brought out their top-notch car-making technology. This led to the establishment of Maruti Suzuki, which was based on the 800 model.

The reason why Byd decided to split into passenger vehicles and commercial vehicles is due to their introduction of the K9 electric bus in India in 2013, where other commercial brands were still playing in the mud. When they decided to officially enter India in 2018, they immediately sought out local partners.

According to related data statistics, Byd’s pure electric bus accounts for 80% of the pure electric bus market in India. However, as mentioned earlier, the pure electric vehicle industry in India is still in its early stages of development, with small and low production volumes.

In fact, both He XPeng and Musk, who advocates staying away from India, and Byd, who tries to be good at both electric and traditional vehicles, are all likely to encounter the same problem – power shortages.

How many charging piles are there in India now?

As of June 2021, there are less than 1,000 charging piles in the whole country, with a total of 934 – just reaching one thousandth of China. In June 2018, the Indian National Energy Efficiency Services Company launched an extremely ambitious plan: to purchase 10,000 electric vehicles for public servants by March 2019.

But to this day, this plan is still just a plan.

Currently, electric vehicle sales account for only 1% of total automobile sales in India.

This 1% includes both two-wheelers and three-wheelers. Only 15,860 pure electric cars were sold in the entire fiscal year 2020-2021. Of course, compared to the previous fiscal year’s sales of 4,695, this was an increase of 230%. But this rate of electrification can only be described as a very early stage of the early stage.

Yes, even though India ranks third in the world in terms of electricity generation, with an annual electricity generation of up to 1.715 trillion kWh, second only to China and the United States, it is still in a state of extreme power shortage. In many places, there are power outages of more than 10 hours a day, and normal power supply is rare. A decade ago, the world’s most severe power outage occurred in 20 states affecting 900 million people for 15 hours.Even if the price of one unit of electricity is only 4 Indian Rupees, which is less than 0.05 USD, much lower than the national average, there are still many poor people who cannot afford to buy electricity and are willing to risk their lives to illegally tap into the power lines. As a result, stealing electricity has become a necessary skill for countless poor people. It is said that in any slum area, everyone, regardless of age or gender, can do this skill. The sky in these areas is covered by thousands of wires that are more complex than spider webs, forming a strange ecological cycle of stealing and cutting which can cause lack of electricity. No wonder the first electric-powered vehicles developed in India are two-wheelers and three-wheelers because they only need to change batteries instead of charging them, which is obviously more reliable than charging stations.

According to official statistics, 27% of the total electricity supply in India in 2021 was stolen. This amount could provide New York with two-year day and night power, equivalent to the total electricity generation of Iran or Saudi Arabia for 15 months! In addition to the ongoing Russian-Ukrainian war and catastrophic weather, Indian power plants are under constant alert due to a coal shortage caused by an increase in demand from countries like China. Even found the Prime Minister of India, Modi, had to appealed to the states to quickly address the electricity debt crisis in their respective areas.

Furthermore, India is the world’s third-largest producer and consumer of coal, with an annual output of about 800 million tons and an import rate of 70% (some say it reached 85%), most of which is used for power generation. Recently, a businessman named Adani surpassed Bill Gates and became the world’s third-richest person and the richest person in India with a net worth of US$ 137 billion, due to his investment in coal mining and power plants through the Adani Group. The group owns 7 listed companies with a total market value of over US$ 251.51 billion as of August 30, 2022.This is truly a magical kingdom with N levels of ice and fire.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.