Tesla might not have quite have yet started manufacturing in India, but its supply chains are already running through the country.
Tesla is looking to source car parts worth $1.7-1.9 billion (Rs. 15,000 crore) from Indian companies next year, Minister for Commerce & Industry Piyush Goyal has said. This is nearly double the value parts Tesla had sourced from Indian companies in FY23. “Tesla already last year bought $1 billion of components I think…this year the target is $1.7 or 1.9 billion,” Goyal said while speaking at the 63rd Annual Convention of Automotive Component Manufacturers’ Association (ACMA).
As of 2018, at least three Indian auto companies — Sandhar Technologies, Bharat Forge, and Sona BLW — had been selling auto parts to Tesla. These exports had grown significantly by last year, when $1 billion worth of parts were exported by Indian companies. It’s expected that this number could double this year.
This increase in reliance on Indian companies could be seen as another sign of Tesla’s impending arrival in India. Just last month, Tesla had leased an office space in Pune’s Viman Nagar for a period of 5 years. Pune, incidentally, happens to be one of India’s auto component manufacturing hubs. A month prior to that, Indian PM Narendra Modi had met Tesla CEO Elon Musk during his US visit, and the visit had been following up with the meeting of two Tesla senior executives with Invest India officials. The officials had reportedly discussed details around Tesla’s plans of entering India and setting up a vehicle manufacturing plant.
Tesla and India have been trying for years to be able to come to an agreement on doing business in India. In 2014, PM Narendra Modi had visited the Tesla factory in the US, and had held discussions with Elon Musk. A year after that, Musk had tweeted that Tesla was in talks with the Indian government to bring their electric vehicles to India. Musk had kept making references to an India entry over the years on Twitter, but nothing had quite materialized. Tesla had even leased a commercial office in Bangalore in 2021, but even that didn’t seem to have gone anywhere.
But there are now even more signs that the relationship between Tesla and India is getting warmer. There have also been reports that Tesla could build a car in India that’ll be priced at Rs. 20 lakh, and sell it in the Indian market. It remains to be seen if this latest series of talks end up with something concrete, but if they do, it might be a win-win for both parties: Tesla would be able to access India’s growing market of 1.4 billion consumers, and India would be able to buttress its manufacturing push by managing to get the world’s most valuable auto maker to make its cars on its shores.