Tesla Explores Establishing Auto Parts Chain In India, Sparks Renewed Interest

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“Tesla Engages in Talks for India Expansion, Seeks Incentives for Auto Parts Chain”

With Prime Minister Narendra Modi’s recent meeting with Tesla CEO Elon Musk, the significance of these discussions for Tesla’s expansion plans and India’s automotive industry is apparent.

In a significant development, Tesla, the US-based electric vehicle manufacturer, is engaged in active discussions with officials from the Indian government regarding the potential establishment of its auto parts and electronics chain in India, according to a report by the Economic Times. These talks reflect a renewed interest from Tesla in the Indian market and include negotiations for incentives and tax benefits.

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The discussions gained momentum following a recent meeting between Prime Minister Narendra Modi and Tesla CEO Elon Musk during Modi’s visit to the United States. Sources familiar with the matter revealed that the talks have revolved around the annual capacity of five lakh vehicles and a starting price of Rs 20 lakh.

Despite the government’s request for Tesla to evaluate the existing auto components supply chain within the country, the electric vehicle manufacturer is keen on building its own supply chain ecosystem in India. A senior government official, who preferred to remain anonymous, confirmed that they have requested specific requirements from Tesla and encouraged them to consider sourcing their needs from the Indian ecosystem. However, the official acknowledged Tesla’s already well-established system of suppliers, making these initial talks crucial for progress.

In addition to engaging with the government, Tesla has been holding meetings with industry executives in India. At a recent gathering organized by the Society of Indian Automobile Manufacturers (SIAM), Tesla expressed its intention to bring its own suppliers to India. While SIAM highlighted the presence of experienced and established Indian component manufacturers, advocating for their inclusion, Tesla emphasized its preference for an “all in-house” approach. The company believes that its specific set of quality standards can only be replicated through its existing partners.

These discussions and engagements hold significant implications for Tesla’s expansion plans in India and the country’s automotive industry. As Tesla explores the establishment of its auto parts and electronics chain, the Indian market presents new opportunities and challenges. 


 

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