© Reuters. FILE PHOTO: Fisker CEO Henrik Fisker announces the Fisker Ocean during the 2021 LA Auto Show in Los Angeles, California, U.S., November 17, 2021. REUTERS/Mike Blake
By Aditi Shah
NEW DELHI (Reuters) – US start-up Fisker Inc will start selling Ocean electric sport utility vehicles (SUVs) in India next July and could start making the cars locally within a few days. next year, the company’s chief executive told Reuters.
Henrik Fisker said in an interview in New Delhi, electric car sales in India will grow rapidly in 2025-26, adding that the company wants to ensure a first-mover advantage.
“Ultimately, India will go all-electric. It may not be as fast as the US, China or Europe, but we want to be one of the first to get here,” Fisker said.
Electric cars currently account for only 1% of India’s roughly 3 million annual car sales, with inadequate charging infrastructure and high battery costs partly to blame for the slow transition.
The government, which wants to increase this to 30% by 2030, is offering companies billions of dollars in incentives to build electric vehicles and their related parts locally.
Fisker (NASDAQ:) Inc’s Tesla rival has postponed its plans to enter India after it failed to secure lower import duties on its cars. Like Fisker, it wants to first import the car to test the market before committing to domestic production.
While Fisker admits importing vehicles into India is “very expensive,” the company wants to use Ocean to build its brand, given the high price tag that could limit quantity, he said.
Ocean retails for around $37,500 in the United States, but importing to India adds logistics costs and a 100% import tax. That would put it out of reach for most buyers in a market where the majority of cars are sold for less than $15,000.
“Ultimately, if you want a larger volume in India, you’re pretty much going to have to start building a car here or at least do some assembly work,” Fisker said.
The company’s next EV – the smaller five-seat PEAR – is being considered for production in India but not before 2026, he said.
“If we can get that car for just under $20,000 locally in India, that would be ideal. Then I think we’ll hit a certain volume and market share.” he said, adding that if they find the right local partner the timeline could be shorter.
Setting up a factory in India would require volume of at least 30,000 to 40,000 vehicles a year, Fisker said.
He did not directly comment on the scale of investment the company considers necessary, but said that setting up a plant with an annual capacity of 50,000 vehicles could cost $800 million in India.
Fisker has a contract manufacturing contract with Magna International (NYSE:) will manufacture Ocean at its unit in Austria and ship it to India. It also has an agreement with Foxconn to build PEAR.
The company is looking for real estate space to open a showroom in New Delhi and is meeting with auto parts suppliers to source components for its global production, he said.
“We’ve started to build some relationships,” he said.