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CFRA Vice President and senior equity analyst Garrett Nelson explains why he's buying Tesla stock after it dropped 31% since the start of 2024 on "Varney & Co."
As Indians start casting votes in the 44-day election that started Friday, Indian Prime Minister Narendra Modi and billionaire entrepreneur Elon Musk will meet, with reports indicating that Musk will announce an investment of $2 billion to $3 billion in the country.
"I don't think Mr. Musk is going to make a huge impact, positive or negative, on Mr. Modi, but [his visit’s] going to solidify Modi as someone who's able to attract the world's fanciest corporations to India to manufacture in India," Siddhartha Dubey, a journalism professor based in Evanston, Illinois, told Fox News Digital.
"Mr. Modi is going to win these elections, no doubt about that," Dubey added. "He doesn't need Elon Musk to help him."
"What Mr. Modi is really, really good at is turning a figure like Elon Musk, the world's richest man who lives in America, into ‘Look at me. Look how well I'm doing. I am able to attract the world's wealthiest man to India. Vote for me.’"
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Musk met with Modi last year during the prime minister’s visit to the U.S. in November, when Musk revealed that he remains "confident that Tesla will be in India and will do so soon as humanly possible."
Indian Prime Minister Narendra Modi, right, meets with Elon Musk in New York on June 20, 2023. (Indian Press Information Bureau (PIB) / Handout / Anadolu Agency / Getty Images)
The Tesla founder seems set to make good on that promise with a massive investment potentially upward of $3 billion, earmarked mainly to build a new factory, according to the Indian Express newspaper. The duo is to meet on Monday to discuss details of the plan that will see Tesla enter the world’s third-largest car market – and to boost an Indian electric car market that remains underdeveloped.
Electric vehicles (EVs) made up just 2% of total car sales in India in 2023, with the government aiming to grow that to 30% starting in 2030, and Tesla will welcome the shift in focus as EV sales in the U.S. and China slow and Tesla has cut jobs, The Hindu newspaper reported.
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Indian Prime Minister Narendra Modi, right, meets with Elon Musk in New York on June 20, 2023. (Indian Press Information Bureau (PIB) / Handout / Anadolu Agency)
"Tesla has no footprint, really, in India in terms of electric cars," Dubey said. "The biggest player in the Indian market right now is Tata [Motors], but Hyundai as well as Mahindra, another Indian manufacturer, and Toyota have strong ambitions for India, and they’re all producing a range of electric cars."
"The thing about Tesla is that it's a premium brand, and Indians are very price conscious," Dubey noted. "So, in regard to selling mass-market electric vehicles in India at a scale, [Tesla’s] pricing has to be really, really important, otherwise, I really don't think it's going to work."
A man uses his smartphone in front of a sign for Tata Motor's passenger electric vehicles, Tata.ev, at the Bharat Mobility Global Expo in New Delhi on Feb. 2, 2024. (Kabir Jhangiani / NurPhoto / Getty Images)
Some have argued that Modi would capitalize on Musk to help boost his ability to create jobs by expanding EV production in his country – thanks to a potential Tesla factory – and other tech-related initiatives that would help drive down the country’s unemployment rate.
India currently suffers from a high unemployment rate among its young college graduate population, with 40% of people ages 20 to 25 unable to find jobs, according to political economist Parakala Prabhakar, who cited the International Labor Organization during a national colloquium on the issue.
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A woman walks past an election campaign poster featuring Indian Prime Minister Narendra Modi in Varanasi on March 24, 2024. (Niharika Kulkarni / AFP)
Prabhakar also noted that domestic investment fell from 30% to 19%. Modi, simultaneously, has urged international investors to put their money into India and "link their growth" with the country’s rapid rise. India last year overtook the United Kingdom and became the fifth-largest economy in the world, rising four places during Modi’s time in office.
Dubey said the current tax on EVs is a "considerable" deterrent to Indian consumers; India is looking at reducing tax rates on imported EVs by around 15%, a significant drop from the current 100% that exists now. Modi has tried to bring the rate down, looking to expedite the adoption to help clear a path for Musk.
Sajjan Jindal, managing director of Jindal Steel, left, Parth Jindal, managing director of JSW Cement, center, and Rajeev Chaba, CEO emeritus of MG Motor India, are shown with an MG Cyberster electric sports car in Mumbai, India, on March 20, 2024. (Ashish Vaishnav / SOPA Images / LightRocket / Getty Images)
Tesla has directed its Berlin factory to start producing right-hand-drive cars with the goal of exporting them to India this year to help speed up adoption.
Details about the plan remain scarce, but reports indicate that Musk will not provide details about a timeline or location of the plant within India. Some have suggested that New Delhi or Mumbai as likely locations.
Dubey, however, noted that Musk presents another opportunity for India: a major boost in the space race, which India has eagerly pursued in recent years. The Indian Space Research Organization, the national space agency of India, in August 2023 successfully completed the first-ever landing on the moon’s southern pole – a feat Russia failed to achieve just days earlier.
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"India’s space industry is really exciting, especially with the last several successful rocket launches, including an unmanned mission to the moon," Dubey said.
"The start-up and private sector in space, which, mind you, is … largely a government sector, is really exciting because a lot of capital [is] going into it," he said. "A lot of very smart Indians as well as Israeli and American and European investors are looking at that industry in India, and that's another place where Mr. Musk, I think, can benefit a lot from his participation."
