Tesla’s niche electric pickup truck has been launched globally and is expected to be available 2025 onwards. While the US and Canada command 54% share of the global pickup truck market and initial reports indicate this new offering garnering close to 7% share in the first year, how does it impact the Indian automotive market?
Well, this launch by Elon Musk-promoted company could actually prove beneficial for the Indian auto component market too. According to Commerce and Industry Minister Piyush Goyal, Tesla was looking to source components worth around $1.9 billion from India. This is almost double of what Tesla sourced the previous fiscal, FY23. The recent upward movement in three specific counters indicate Varroc Engineering, (up 21.56% in last one month) Sandhar Technologies (up 30.69% in last one month) and Sona BLW Precision Forgings (up 1.30% in last one month)
Apart from that, there are few other auto component companies that have exposure to these companies and these include SAMIL and Suprajit Engineering. In 2022, Bengaluru-based Suprajit Engineering bought out the light duty cable (LDC) business unit from Kongsberg Automotive for an enterprise value of $42 million. This has given Suprajit access to markets across US, Germany, France, Sweden, and the UK.
Additionally, the TVS Group-owned, Sundram Fasteners, is making key parts in gear transmission for Tesla as it moves forward with its EV aspirations.
Studies indicate that If Tesla were to achieve the stated target production capacity of 250,000 units and an 80% capacity utilization for Cybertruck in CY25, it would sell 200,000 units in CY25 which implies a market share of 6-7% in CY25 itself. According to analysts at Elara Capital, “While a portion of market believes Cybertruck customer may remain niche and not impact the ICE pickup trucks market of GM, Ford, and Stellantis, we believe given its unconventional looks, design, features, performance and Tesla brand pull, Cybertruck has the potential to surprise on the positive on the demand front.”
