US startup Fisker will start selling its Ocean electric sport utility vehicle (SUV) in India next July and could start manufacturing its cars locally within a few years, the company’s CEO told Reuters.
Sales of electric cars in India will accelerate by 2025-26, Henrik Fisker said in an interview in New Delhi, adding that the company wanted to secure a first-mover advantage.
“In the end, India will go fully electric. It might not go as fast as the United States or China or Europe, but we want to be one of the first to come here,” Fisker said.
Electric cars currently account for just 1% of India’s roughly 3 million annual car sales, with insufficient charging infrastructure and high battery costs partly to blame for the slow pace of change.
The government, which wants to increase that share to 30% by 2030, is offering companies billions of dollars in incentives to build their electric vehicles and associated parts locally.
Fisker’s rival Tesla has suspended plans to enter India after failing to secure a lower import tariff for its cars. Like Fisker, it first wanted to import vehicles to test the market before committing to local manufacturing.
While Fisker has admitted it is “very expensive” to import vehicles into India, the company wants to use the Ocean to grow its brand, with its premium prices likely to limit numbers, he said.
The Ocean sells for around $37,500 (almost 30.41,600 rupees) in the United States, but importing it to India would incur logistics costs and 100% import tax. That would put it out of reach for most buyers in a market where most cars sold are priced below $15,000 (almost 12,16,600 rupees).
“At the end of the day, if you want to have a bit more volume in India, you almost have to start building a vehicle here or at least do some assembly,” Fisker said.
The company’s next electric vehicle – the smaller five-seater PEAR – is being considered for production in India, but not before 2026, he said.
“If we can get this vehicle just under $20,000 (nearly Rs 16.22,700) locally in India, that would be ideal. Then I think we will achieve some volume and market share” , he said, adding that if they find the right local partner, the time frame could be shorter.
To set up a factory in India would require a volume of at least 30,000 to 40,000 cars per year, Fisker said.
He did not directly comment on the size of investment the company felt was needed, but said setting up a factory with an annual production capacity of 50,000 cars would likely cost $800 million (nearly Rs 6,500 crore) in India.
Fisker has a contract manufacturing agreement with Magna International which will produce the Ocean at its Austrian unit and ship it to India. It also has an agreement with Foxconn to build the PEAR.
The company is looking for real estate space to open a showroom in New Delhi and is meeting with auto component suppliers to source parts for its global production, he said.
“We are already starting to build relationships,” he said.