Tesla Has Signed A Deal With Tata Electronics For Semiconductor Chips: Report

Even as Elon Musk is set to visit India later this month and meet PM Modi, Tesla seems to have already begun collaborating with Indian companies in earnest.

Tesla has signed a strategic deal with Tata Electronics to buy semiconductor chips, ET reports. The deal was reportedly executed discreetly a few months ago. Tata Electronics has in recent months also bolstered its workforce by hiring 50-60 top-level expatriates, aiming to leverage their expertise to enhance its business operations. Tata’s chips will likely be used in the manufacture of Tesla cars.

The Tata Group is a new entrant into the semiconductor space. The group is in the process of setting semiconductor plants in Hosur in Tamil Nadu and Dholera in Gujarat, and had recently commissioned a new plant in Assam which will produce semiconductor chips. These chips will be in the 28 nm range, which can be used in cars and other electronics. It appears that Tata Electronics will supply at least some of these chips to Tesla for its global factories.

The deal, if it does go through, will be yet another sign that Tesla intends to enter the Indian market. CEO Elon Musk has already tweeted that he is excited to meet PM Modi, and there had been reports last week that Tesla has already begun manufacturing cars in Germany which will be exported to India. A deal with Tata Electricals suggests that Tesla is also intending to manufacture cars in India, and avail of the subsidies being offered by the Indian government.

And it’ll be a bouquet of negotiations that’ll likely take place when Elon Musk meets with Indian officials. The two sides will decide on whether Tesla sets up factories in India, and at which locations, and at what terms it’s allowed to import cars into the country. There will also likely be discussions on how many local manufacturers Tesla will support, and to what degree. And to make matters even more interesting, Elon Musk’s other startup Starlink’s India entry will also be on the table, which will enable it to provide satellite broadband services in the country. It’s a pretty complicated mix of decisions, but given how Tesla already appears to have agreements in place with the Tatas, and Musk has confirmed his India visit, a wide-ranging set of agreements between India and Musk looks to be on the cards.