Illustration: Liu Xiangya/Global Times

Although Elon Musk's planned visit to India has been postponed, Tesla's entry into the Indian market is expected to continue. However, it seems that things are not progressing as smoothly as optimists expected.

Citing "very heavy" obligations at Tesla, Musk postponed his highly anticipated trip to India, during which he was due to meet with Indian Prime Minister Narendra Modi and was expected to unveil plans for the company's entry to the country. It should be noted that the news came several days after reports that the US electric vehicle (EV) maker was laying off more than 10 percent of its global workforce.

Some analysts said that it is natural to see the ebb and flow of hiring and firing in a business, but more people believe that the reported layoffs add to signs that the US EV giant is pulling out all the stops to cut costs and boost productivity, after reporting dismal first-quarter sales. At this critical moment, a key question is whether India's manufacturing sector can help the EV giant achieve its goals of efficiency improvement and cost reductions.

India's manufacturing industry enjoyed robust growth in recent years, but the country's industrialization is still at its early stage. A series of challenges, such as a lack of skilled workers, high illiteracy rates and weak industrial infrastructure constrain the development of India's manufacturing sector. 

As more companies join EV giants like Tesla in the market, competition for the burgeoning EV market share is likely to intensify. Amid such fierce international competition, India's manufacturing industry, although developing rapidly, may not be strong enough to offer cost-saving solutions and help Tesla maintain its competitive advantage.

Of course, this does not mean Tesla should suspend its investment plans in India. On the contrary, many believe Tesla will set up a local EV manufacturing site in the country. However, its plan is likely to focus mainly on India's local EV market, rather than the broader market in the world, especially in the initial stages of investment. India may still have a long way to go in making itself a global manufacturing hub for EVs.

Some foreign media outlets are keen to hype the competition faced by Tesla in the China market, but this is not the whole story. China's strong manufacturing capabilities, well-established industrial chain and vast consumer market for EVs provide tremendous opportunities for Tesla. China holds an important position in the company's global strategy, laying the solid foundation for its performance around the world.

As reported, EV sales in India reached a record 1.53 million units in 2023. The Chinese EV market is approximately six times that of India. In the foreseeable future, it will be hard for India to replace China in the burgeoning EV industry because of China's resilience on the back of massive domestic market demand, sufficient capital, and great scientific and technological progress.

Some observers view Tesla's investment from the perspective of China-India competition. They claim Tesla "is looking for newer markets amid sales slowdowns in the US and China," and India is among the potential markets for the US EV maker. 

This opinion is narrow-minded and short-sighted. The EV industries in China and India are at different stages of development. The complementarity of the two economies is greater than their competition.

China and India have very different national conditions, so they have their own characteristics in developing sectors such as EVs. Enormous potential remains to be tapped in bilateral cooperation. For instance, India's lack of world-class EV supply chains poses potential obstacles for its expansion and manufacturing development. 

China's supply chain advantages can help companies investing in India to improve their production efficiency and reduce their production costs.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn