Tesla to double components sourcing from India

As the talks between Tesla and the Indian government are reportedly ongoing, Tesla has been sourcing components from India, which is expected to increase in 2023.

Reuters and Mint reported that Piyush Goyal, India's commerce minister, said at the annual session of the 63rd Automobile Component Manufacturers Association of India that Tesla bought US$1 billion of components from India in 2022, and the figure will rise to US$1.7–1.9 billion in 2023.

Meanwhile, following a Reuters report saying that India is considering slashing custom duties for imported EVs on certain conditions, Goyal said at the event that India will come up with incentive policies to attract EV makers to invest in India.

According to the Bloomberg supplier database, Tesla has five suppliers based in India, including Hindalco Industries and Samvardhana Motherson International, a subsidiary of Motherson Sumi Systems. It remains unclear what products Tesla has been sourcing from these suppliers.

Since 2021, Tesla has been attempting to enter India, but it has encountered obstacles due to disagreements over the tariffs applicable to imported EVs. India resisted reducing the import duties as suggested by Tesla to protect the local automotive industry and promote EV manufacturing. There were also concerns about opening the door to an influx of Chinese-made EVs, particularly from Chinese EV companies.

The situation began to shift after India's Prime Minister Narendra Modi held discussions with Tesla CEO Elon Musk during their meeting in the US in late June. Following this meeting, Musk expressed Tesla's commitment to entering the Indian market as soon as possible. Subsequently, quoting sources, Reuters reported that India and Tesla initiated high-level discussions.

Source: Bloomberg, September 2023