Traffic congestion in Delhi, India. Jeremy Woodhouse | Photolibrary | Getty Images

Despite the seemingly aligned interests, there are reasons underlying the Tesla founder and CEO's less-than-gung-ho tweets. Tesla and India aren't ready for each other just yet. It could take years for Tesla to debut in India.

Here comes the sticker shock

India is a highly price-sensitive market, which is a fact known globally. From to Uber and , many foreign companies have had to launch low-price versions of their products in a bid to make inroads in the Indian market. Tesla's Model X, priced at roughly $90,000, and the Model S, carrying a $70,000 price estimate, are far out of the average Indian car buyer's budget. It would be hard for Tesla to achieve mass-market volume in India necessary for a venture to make good business sense for the luxury car maker. "About 85 percent of the market is filled with value-conscious customers, [which] has the largest potential for growth," said Chetan Maini, the creator of Reva, India's first electric car. "Successful solutions designed so far have considered the price points they are willing to afford. Foreign or local electric cars (EVs) will grow in India only when there's price parity with its internal combustion engine (ICE) equivalent." Even Tesla's upcoming Model 3 sedan — which starts at $35,000 and considered an affordable option in the United States — at 2.2 million rupees it is still a high-end luxury product by Indian standards, affordable only to a wafer-thin segment of India's car enthusiasts. "India's mobility paradigm has very different characteristics as compared to that of Western counterparts," Maini said. He is also the vice chairman of SUN Mobility, a company that makes replaceable batteries for electric cars. "In the past, solutions tailored for the local conditions have worked well." Morningstar analyst David Whiston wrote in a recent report that there's huge uncertainty as to whether Tesla will succeed in making great product at an affordable price. "There is evidence suggesting that Tesla will succeed, but if not, Tesla will remain an automaker for the wealthy," he wrote. Emails sent to Tesla inquiring about the company's India plans went unanswered.

Lagging infrastructure

Adoption and expansion of electric vehicles in India will require an ecosystem to support their practicality, frugality and clean-energy objectives. India's ambitious goals for green mobility — roads, charging stations, power storage, service centers and suppliers — contrast with the nation's inadequate infrastructure. "The key challenges to adoption of EVs in India are low penetration of charging infrastructure," said Mahesh Babu, CEO, Mahindra Electric, the electric vehicle division of Mahindra and Mahindra. "Given these conditions, it is understandable that local as well as foreign players may hesitate to expand in the Indian market." Several stakeholders have started discussions on developing an extensive EV ecosystem in India, but it may be a few years before a reliable infrastructure is in place. Babu said public-private partnerships are one way to speed things up. "Such partnerships will help in developing the market, both in terms of infrastructure as well as education and awareness," he said. Sugato Sen, deputy director general at the Society of Indian Automobile Manufacturers, said an investment by Tesla in India could help boost EV infrastructure and adoption. "If we have companies like Tesla in the country, the infrastructure for charging vehicles and suppliers for EV components will come up faster," he said. Tesla has invested billions in the U.S., China and Japan to set up networks of charging stations, and continues to pour capital into their expansion. Tesla won't reveal if it has similar plans for India.

India's pivot to green energy has paved the way for local companies to rush in with their EV offerings. Mahindra Electric is leading the charge with its homegrown, battery-operated e2o Plus, a $10,000 car that goes about 87 miles per charge. By comparison, Tesla's most affordable $35,000 Model 3 claims a range of 214 miles per charge. Mahindra makes up in affordability what it lacks in mileage, which it's trying to ramp up. Local automakers are quick to point out the significant home-field advantage they enjoy relative to foreign carmakers. "We have the unique position of having years of experience of the Indian market as well as over 265 million kms (164 million miles) driven on our EVs," Babu said. "This does put us at a certain advantage, and we have used these insights to develop our current and future products." Maini said local players' in-depth understanding of local conditions creates advantages but ultimately can be co-opted. "Any foreign company can create a great business opportunity by understanding the local consumer behavior and market characteristics, and design a solution suitable for that country," he said. A production plant in India may be a worthwhile investment for Tesla. "Tesla's mission is to make EVs increasingly more affordable, which means more assembly plants must come online to achieve annual unit delivery volume in the millions," Morningstar analyst Whiston wrote. Musk did say at the recent Tesla annual shareholder meeting that he would like to build a new plant for the Model Y crossover vehicle. Though no details were given, the assumption for that is a U.S.-based facility. Musk has also said he plans to build multiple electric-battery gigafactories beyond the first gigafactory in Nevada.

We have the unique position of having years of experience of the Indian market as well as over 265 million kms (164 million miles) driven on our EVs. Mahesh Babu CEO, Mahindra Electric