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By Aditi Shah, India Autos Correspondent

Greetings from New Delhi, where I will bring you the Auto File this week while Detroit takes a late summer break.

It’s been a busy few weeks in India with Tesla and BYD, two of the world’s largest electric vehicle makers, dominating headlines. The two rivals want to gain access to India’s small but fast-growing EV market with plans to build a plant and electric cars locally.

Growing interest in India, the world’s third-largest car market, comes at a time when major global firms, including carmakers, have warned of slowing sales in China as the post-pandemic surge fades.

There is, however, no slowdown in EV sales in China where domestic carmakers are giving global automakers a run for their money. While first-quarter profits for Japan’s Toyota Motor doubled from a year ago, its earnings in the Chinese market took a hit because of “extreme competition”.

No surprise then that the dominant theme today is EVs.   

Today –

• • Is India the next major EV battleground?
  • Global firms hit sales speedbump in China
  • Toyota’s profit high

A Tesla Model X electric car is seen at the Brussels Motor Show, January 9, 2020. REUTERS/Francois Lenoir/File Photo

Tesla executives have been in New Delhi over the last several days holding closed-door meetings with Indian Prime Minister Narendra Modi’s officials, fleshing out plans to invest in the country.

The U.S. automaker wants to set up a factory in India to manufacture a low-cost $24,000 EV and build out a local supply – a sharp about-turn from its strategy last year to import cars first and then set up a factory.

India is listening intently, and offering advice. Tesla has said it wants to bring its Chinese suppliers to India but fractious ties between New Delhi and Beijing could spell trouble. The government has offered a workaround – pair the Chinese suppliers with local firms, just like Apple did.

For its rival, China’s BYD, the solution does not appear to be so easy. The government is reluctant to approve BYD’s $1 billion investment proposal to build cars in the country, and the automaker now wants to shelve those plans.

The Chinese company is facing further heat from India’s tax officials that allege it underpaid taxes on some imports.

Not too far behind is Foxconn which is also eyeing India as a potential production base. The Taiwanese company’s EV platform unit Mobility in Harmony (MIH) is targeting India or Thailand to build a new three-seat EV priced between $10,000 and $20,000 and tailor-made for a corporate delivery fleet.

India is a potential “emerging power for the next generation” in the EV sector, MIH’s CEO Jack Cheng told Reuters in an interview.

A view shows the booths of German carmakers Audi and Volkswagen at the Auto Shanghai show, April 19, 2023. REUTERS/Aly Song

Global automakers in China are facing a double-whammy from deepening competition from local Chinese EV makers and an overall slowdown in sales after a post-pandemic surge. Domestic automakers for the first time took a more than 50% share of the Chinese market in the first half of 2023, forcing their global rivals to redraw their outlook for the market.

Nissan’s CEO said it is likely to take time for earnings in the world’s biggest auto market to recover. “Unfortunately, our (China) sales outlook is now falling far below our production capacity,” Makoto Uchida said.

Volkswagen, too, has cut its full-year sales target after sales dipped in China, its top market. But with Europe pushing automakers to accelerate the shift to EVs, automakers are finding it hard to ween off their reliance on China. Volkswagen is in talks with a Chinese electric vehicle startup, Zhejiang Leapmotor Technology, about the possibility of buying a platform of EV technologies for its Jetta brand, a Chinese media outlet reported on Wednesday.

A Toyota Tacoma is seen during the New York International Auto Show, in New York City. REUTERS/Andrew Kelly

Toyota’s first-quarter profits have accelerated under its new CEO after he laid out a fighting strategy for the carmaker in the global race for battery-powered vehicles.

The numbers sent shares in the $230-billion Japanese vehicle manufacturer to an all-time high. But this may not be enough, and it now needs to speed up its electrification plans to outpace competition.

Toyota is trying to script a turnaround with greater focus on EVs but while it does that the automaker needs to keep a close watch on its Chinese rivals that are encroaching on some of its strongest turfs like Southeast Asia.

Ford is revving up production of its F-150 Lightning electric truck, as it looks to test mainstream demand for EV trucks at a time when rival Tesla is ramping up output of its electric pickup truck, the Cybertruck.

While Ford will not back away from plans to triple the production of the Lightning, it has put its overall EV capacity expansion plans in slow gear. Why? There is no money to be made yet.

The Japanese automaker plans to bring a hybrid version of its iconic Land Cruiser to North America and other key markets as it seeks to put a high-margin, sports utility vehicle back on the map.

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