Tesla, the renowned electric vehicle manufacturer, is planning to significantly increase its component sourcing from India this year, according to the nation’s trade minister. The company aims to almost double its investment to reach up to $1.9 billion, highlighting the growing importance of electric vehicle component manufacturing in India. While Tesla has expressed interest in building its own plants in the country, these plans have yet to materialize.
Key Takeaway
Tesla plans to double its component sourcing from India to
.9 billion this year, reaffirming the growth of the electric vehicle market in the country. The government’s goal of expanding electric vehicle sales to comprise 30% of all four-wheeled vehicles sold by 2030 is expected to drive further investment and development in this sector.
Last year, Tesla purchased $1 billion worth of automobile components from India. This year, the company is targeting a substantial increase to $1.7-$1.9 billion, as announced by India’s commerce minister, Piyush Goyal, during an auto event in New Delhi on Wednesday. Goyal also emphasized that India will benefit from the influx of new technologies, innovation, and research and development. Not only will the auto component industry cater to the rising demand in India, but it will also have the opportunity to export these components worldwide.
Elon Musk, Tesla’s CEO, met with Indian Prime Minister Narendra Modi in June and expressed the company’s interest in investing in India and establishing a local presence in the market as soon as possible. However, no specific timeline, investment plan, or additional details were provided during the meeting.
Discussions between Tesla and the Indian government regarding the carmaker’s entry into the country have been ongoing for several years. While Tesla has hinted at manufacturing its vehicles locally in India, it has insisted on obtaining permission to sell and service imported vehicles first. The possibility of Tesla establishing a manufacturing center in India has fueled the nation’s aspirations to compete with China and become a significant player in the global electric vehicle market.
At present, Tesla manufactures its vehicles and components in five countries, with China being the only Asian nation among them. The inclusion of India as a potential manufacturing hub for Tesla’s electric vehicles has been a driving force behind the country’s ambition to become a producer and major consumer in the electric vehicle market.
Electric vehicles currently account for a mere 2% of all four-wheeled vehicles sold in India from January to July of this year. The Indian government aims to raise this figure to 30% by 2030. Leading the electric vehicle market in India at present are domestic automaker Tata Motors, along with Chinese manufacturers BYD and MG Motor (owned by SAIC). However, well-established brands such as Maruti Suzuki, Mahindra, Hyundai, and Honda have yet to introduce electric vehicles in the country.
