Tesla is increasingly sourcing critical components from Indian suppliers, with Tata AutoComp, Tata Consultancy Services, Tata Technologies, and Tata Electronics emerging as key partners. The shift, worth nearly $2 billion in FY24, highlights Tesla’s efforts to diversify its supply chain amid its potential entry into India. After the Covid-19 pandemic disrupted global supply chains, Tesla has been actively reducing its dependence on China, instructing suppliers to shift production away from both China and Taiwan for vehicles sold outside the region. India has emerged as a preferred alternative, with Tesla sourcing components such as wiring harnesses, electric motors, gearboxes, suspension systems, battery management units, and high-value electronics. Reports indicate that Tesla now sources from more than a dozen Indian firms, including Samvardhana Motherson, Suprajit Engineering, Sona BLW Precision Forgings, Bharat Forge, Varroc Engineering, and Sandhar Technologies. Tesla is in discussions with several Indian states regarding potential manufacturing sites. The company is closely monitoring India’s incentives, including special concessions and duty waivers, to finalise its expansion roadmap. However, Tesla’s strict confidentiality agreements with suppliers make details scarce. A source close to the matter confirmed: 'India is currently very much in the development and supply mode for Tesla.' While Tata Motors remains India’s largest EV seller, its market dominance is under pressure. The company initially capitalised on its first-mover advantage, but it may fall short of its target of 100,000 EV sales due to market slowdowns, reduced government subsidies, and increasing competition. Tesla’s potential entry into India could further disrupt the market, offering Indian consumers more choices and intensifying the competitive landscape. With Tesla’s ongoing supplier partnerships and potential manufacturing plans, India’s role in the global EV ecosystem is expanding. The increasing shift of production to Indian companies not only strengthens Tesla’s supply chain but also enhances India’s position as a key player in the electric vehicle industry.

Tata Group Partners With Tesla: A New Era for India's EV Supply Chain

Tesla is expanding its supply chain in India, partnering with Tata Group companies and other Indian firms to source critical components for its vehicles. This shift, valued at nearly $2 billion in FY24, is part of Tesla's strategy to diversify its supply chain amid potential entry into India. The move aims to reduce reliance on China and Taiwan, with India becoming a preferred alternative. Tesla is exploring manufacturing sites in India and leveraging incentives to finalize its expansion. Tata Motors, India's largest EV seller, faces market challenges including reduced government subsidies and increasing competition, which may hinder its target of 100,000 EV sales.