In 2019, Elon Musk, the CEO of Tesla, publicly voiced his interest in establishing Tesla in the Indian automobile market. Before a deal was set in stone, Tesla faced a major obstacle. Toward the end of 2021, Tesla lobbied the Indian government to reduce import taxes to under 40% on electric vehicles (EVs). The Indian government declined the condition, suggesting that Tesla assemble the cars in local manufacturing plants. In 2023, however, the Indian government presented Tesla executives with an offer to construct a Giga factory in India. If Tesla accepts, which seems to be the case as the company recently finalized locations in India, the factory will become a crucial component in India’s efforts to combat poverty. Poverty has been a major focus of India’s political agenda for the past few decades. Now that Tesla is paving a path into the Indian market, India has yet another avenue to decrease poverty. With the Indian government, Tesla can eliminate poverty in India in three ways.
3 Ways Tesla Can Eliminate Poverty in India
- Increases Automobile Industry Output and National GDP Value: In 2022, India ranked fourth in global car sales and grew an impressive 23% in the past year, the third-largest automobile industry growth rate in the world. As Tesla aims to enter India, it has the potential to significantly increase the value of the Indian automobile industry. The Indian automobile industry is currently valued at $32.7 billion. With business from companies such as Tesla, India’s automobile industry is projected to be valued at $54.84 billion by 2027. This is because Tesla is the 11th largest car manufacturer in the world. This also means India will soon eclipse Japan as the third-largest automobile market worldwide. The Indian EV market alone is projected to be valued at $7.09 billion by 2025. This means India will become the third-largest EV market by 2025. Tesla’s potential impact on the Indian Automobile Industry also correlates to an increase in India’s GDP. This is because Tesla plans on using India as a central hub for exports across Asia. Between 2020 and 2022, India’s GDP increased from $2.67 trillion to $3.39 trillion. As India begins to export Teslas, the increase in export revenue will continue to increase the national GDP. The higher the national GDP, the lower the poverty rates. Given these trends, Tesla can eliminate poverty in India through an improved automobile industry and a higher national GDP.
- More Jobs: Employment is the most effective method to help alleviate poverty. While India’s overall unemployment rate in 2022 was 7.3%, this statistic is slightly misleading. Specifically, 23.2% of the youth in India were unemployed as of 2022. This is alarming as addressing poverty in India could become very challenging if the next generation faces limited job opportunities. Fortunately, Tesla can eliminate poverty in India through the creation of new jobs. As of 2021, the Indian Automotive Industry provided jobs for more than 37 million people. Once Tesla, among other car manufacturers, enters India, the automotive industry is estimated to provide jobs for more than 65 million people by 2026. One of the reasons Tesla can create a vast amount of jobs in India is that it does not require skilled labor. Jobs such as assembly line workers do not require expertise or intensive training. This will allow people who lack education or need temporary income to have the possibility to obtain a job. As a result, more people in India will gain employment, thus preventing them from falling into poverty.
- Promotes India’s Initiative to Address Carbon Emissions: In the 2021 U.N. Climate Change Conference, India set several commitments for the country’s agenda to reduce carbon emissions. One of India’s commitments was to reach net-zero carbon emissions by 2070. To meet this goal, India has heavily pushed for renewable energy. As of 2022, India ranked fourth in renewable energy installation. With Tesla on the horizon, India has yet another approach to further its goals. Along with the recent surge in India’s EV market, Tesla has the potential to become a prominent car brand in India. This is beneficial for India as cars are one of the largest sources of carbon emissions around the world. EVs, such as Tesla, can help alleviate carbon emissions. In turn, India’s goal to eliminate carbon emissions can also help eradicate poverty. This is because changing weather patterns induces poverty as it burdens people with conflict, hunger and inhospitable living conditions and can sabotage their source of income. Therefore, combating environmental challenges can assist the poor and present them with a path to escape poverty. As such, the environmental benefits of Tesla can eliminate poverty in India.
Tesla’s Future in India
Although the future of Tesla in India is not fully determined, its potential benefits act as another tool for India’s efforts to eradicate poverty. These efforts have been highly successful; from 2011 to 2019, the population of Indians living below the poverty line decreased by 144.89 million people. As India emerges as a global leader in the fight against poverty, the country still has much work to do. Companies that invest in India, however, can help the country complete its efforts. In this way, Tesla can be a major boon for India and further its efforts to eliminate poverty.
– Manav Yarlagadda