Corporate

Tata Group Set to Gain as Tesla Prepares for India Launch: Here’s Why

Several Tata Group companies like —Tata AutoComp, TCS and Tata Technologies—are already key suppliers to Tesla, as per the report. These companies have global supply agreements with Tesla, contributing to the $2 billion worth of Indian supplies to the automaker in FY24

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Elon Musk’s electric vehicle giant Tesla is reportedly on the verge of opening its showrooms in India. As per the Indian government's mandate, to sell its vehicles at a lower import duty, Tesla must invest in local manufacturing.

A recent report by The Economic Times (ET) claims that Tesla is preparing its supplier base in India. The report states that Tesla’s senior global procurement team has engaged with suppliers, discussing the development and production of critical components such as castings, forgings, electronics, and fabrication items.

The report further suggests that Tata Sons could play a crucial role in Tesla’s India expansion. Several Tata Group companies—Tata AutoComp, TCS, and Tata Technologies, —are already key suppliers to Tesla, reportedly accounting for nearly half of the global automotive market value of Tesla suppliers.

These Tata Group companies have global supply agreements with Tesla, contributing to the $2 billion worth of Indian supplies to the automaker in FY24, according to the ET report. While these agreements currently support Tesla’s international operations, the company’s decision on local production or contract manufacturing in India will determine the next phase of engagement.

Notably, Tesla does not officially disclose its suppliers. Reports suggest that the Musk-led firm includes strict non-disclosure clauses in its supplier agreements to keep sourcing details confidential.

However, over the years, multiple reports have revealed that several Indian firms supply components to Tesla. These include Samvardhana Motherson, Suprajit Engineering, Sona BLW Precision Forgings, Varroc Engineering, Bharat Forge, and Sandhar Technologies.

Among Tata Group companies, Tata AutoComp supplies engineering products, Tata Technologies provides end-to-end product lifecycle management, and TCS offers circuit-board technologies. Additionally, Tata Electronics is reportedly expected to supply chips and key vehicle control elements for Tesla, including printed circuit board assemblies for its battery management systems, motor controllers, and door controls.

Tesla’s India Foray Plan

Following a meeting between Elon Musk and Prime Minister Narendra Modi in Washington, Tesla has accelerated its hiring efforts in India, advertising senior positions in Delhi and Mumbai. The EV maker has also reportedly finalized showroom spaces in both cities.

For now, Tesla will have to sell its imported cars in India, which could attract duties as high as 110% if the company fails to comply with the Modi government’s new electric vehicle (EV) policy.

Under this policy, announced last year, the government reduced import duties on EVs priced above $35,000 from 110% to 15%, applicable for up to 8,000 units annually.

To qualify for this exemption, manufacturers must invest a minimum of Rs 4,150 crore (approximately $500 million) in local operations—excluding prior investments and land or building costs—and achieve a turnover of Rs 2,500 crore by the second year. Additionally, only 5% of this investment can be allocated to EV charging infrastructure.

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