Fisker to sell electric SUVs in India for local production

Fisker to sell electric SUVs in India for local production


By Aditi Shah

NEW DELHI (Reuters) – US startup Fisker will start selling its Ocean electric sports utility vehicle (SUV) in India in July and may start building its cars locally within a few years, the company’s chief executive told Reuters.

Henrik Fisker said in an interview in New Delhi that sales of electric vehicles in India will pick up pace by 2025-26, adding that the company wants to secure the first mover advantage.

“Eventually, India will be fully electric. It may not go as fast as the US or China or Europe, but we want to be one of the first to come here,” Fisker said.

Electric vehicles currently make up only 1% of India’s annual car sales of around 3 million, with inadequate charging infrastructure and high battery costs attributable in part to the slow turnaround.

The government, which wants to increase that share to 30% by 2030, is offering billions of dollars in incentives to companies to build their electric vehicles and related parts locally.

Fisker (NASDAQ:) Inc’s rival Tesla has halted plans to enter India after it failed to secure lower import tariffs for its cars. Like Fisker, it first wanted to import vehicles for market testing before committing to local manufacturing.

While Fisker admitted it is “too expensive” to import cars into India, the company wants to use Ocean to build its brand, with its premium pricing likely to limit numbers, he said.

The ocean sells for about $37,500 in the US, but importing it into India will add logistical costs and a 100% import tax. This would put it out of reach for most buyers in a market where the bulk of cars sold are priced under $15,000.

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โ€œUltimately, if you want to get a bit bigger in India, you almost have to start building a car here or at least do some assembly,โ€ Fisker said.

He said the company’s next electric vehicle – the smaller five-seater – is under consideration for production in India but not before 2026.

โ€œIf we can get that car for less than $20,000 locally in India, that would be ideal. Then I think we will reach a certain size and a certain market share,โ€ he said, adding that if they find the right local partner, the timeline can be shorter.

Fisker said a plant in India would require a minimum volume of 30,000 to 40,000 cars per year.

He did not directly comment on how much investment the company considers necessary, but said that setting up a plant with an annual production capacity of 50,000 cars would likely cost $800 million in India.

Fisker has a manufacturing agreement with Magna International (NYSE:) which will produce the ocean in its Austrian unit and ship it to India. It also has an agreement with Foxconn to build pears.

He said the company is exploring a real estate space to open a showroom in New Delhi and meeting with auto component suppliers to get spare parts for its global production.

“We’ve already started building some relationships,” he said.

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