TESLA IN 2023: CRAFTING A STRATEGY FOR THE INDIAN MARKET
CASE STUDY SOLUTION
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SYNOPSIS
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In July 2023, Tesla, Inc. (Tesla), a global leader in the manufacture and sales of electric vehicles, needed to
formulate its entry strategy in India. Tesla’s chief executive officer, Elon Musk, had met Indian Prime Minister
Narendra Modi on his visit to the United States in June 2023 and expressed optimism about India as a market
for Tesla. This development was in sharp contrast to the events of just over a year earlier, when Musk and
Tesla had expressed disappointment with the Indian government’s policy of heavily taxing imports of fully
n
assembled Tesla cars and had seemingly abandoned their plans to enter India, at least in the short term. Despite
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the thaw in the relationship with the Indian government, Tesla’s top management needed to get a number of
critical decisions right if the company’s entry into the Indian market was to be successful.
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The Case Solution Starts From page 4
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ASSIGNMENT QUESTIONS
1. Is India an attractive market for making EVs?
2. How would you evaluate Tesla’s non-market strategy? What else might it have done?
3. What are the pros and cons of choosing local manufacturing for Tesla?
4. Which states are attractive locations for an assembly plant?
5. What should be Tesla’s long-term strategy in India?
The Case Solution Starts From page 4
, 2. How would you evaluate Tesla’s non-market strategy? What else might it have done?
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Different actors constantly try to influence the environment as businesses create value for themselves and
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others. For this, they may use laws and regulations and even deploy other means such as social pressure
and activism, changing public perception of businesses. The non-market strategy perspective recognizes
that, in today’s complex global environment, corporate strategy must go beyond commercial or market
m
aspects. Firms need to engage with their social and political environments and may even attempt to shape
the rules of the game.22 Most firms, however, fail to understand that gaining a sustained competitive
Sa
advantage requires them to be ambidextrous—that is, to pursue both market and non-market strategies.23
Prior to 2022, Tesla had adopted an adversarial stance toward the Indian government, a poor non-market
strategy. It had insisted on pursuing its own strategy, which was probably based on economic analysis that
indicated importing was the most feasible strategy, given the limited volumes, and it implicitly suggested
n
tio
lu
So
The Case Solution Starts From page 4
CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
In July 2023, Tesla, Inc. (Tesla), a global leader in the manufacture and sales of electric vehicles, needed to
formulate its entry strategy in India. Tesla’s chief executive officer, Elon Musk, had met Indian Prime Minister
Narendra Modi on his visit to the United States in June 2023 and expressed optimism about India as a market
for Tesla. This development was in sharp contrast to the events of just over a year earlier, when Musk and
Tesla had expressed disappointment with the Indian government’s policy of heavily taxing imports of fully
n
assembled Tesla cars and had seemingly abandoned their plans to enter India, at least in the short term. Despite
tio
the thaw in the relationship with the Indian government, Tesla’s top management needed to get a number of
critical decisions right if the company’s entry into the Indian market was to be successful.
lu
So
The Case Solution Starts From page 4
, e
pl
m
Sa
n
tio
lu
So
ASSIGNMENT QUESTIONS
1. Is India an attractive market for making EVs?
2. How would you evaluate Tesla’s non-market strategy? What else might it have done?
3. What are the pros and cons of choosing local manufacturing for Tesla?
4. Which states are attractive locations for an assembly plant?
5. What should be Tesla’s long-term strategy in India?
The Case Solution Starts From page 4
, 2. How would you evaluate Tesla’s non-market strategy? What else might it have done?
e
Different actors constantly try to influence the environment as businesses create value for themselves and
pl
others. For this, they may use laws and regulations and even deploy other means such as social pressure
and activism, changing public perception of businesses. The non-market strategy perspective recognizes
that, in today’s complex global environment, corporate strategy must go beyond commercial or market
m
aspects. Firms need to engage with their social and political environments and may even attempt to shape
the rules of the game.22 Most firms, however, fail to understand that gaining a sustained competitive
Sa
advantage requires them to be ambidextrous—that is, to pursue both market and non-market strategies.23
Prior to 2022, Tesla had adopted an adversarial stance toward the Indian government, a poor non-market
strategy. It had insisted on pursuing its own strategy, which was probably based on economic analysis that
indicated importing was the most feasible strategy, given the limited volumes, and it implicitly suggested
n
tio
lu
So
The Case Solution Starts From page 4
