Tata Group Partners With Tesla To Become Global Supplier To EV Maker

Tata AutoComp, Tata Consultancy Services, Tata Technologies and Tata Electronics have quietly become global suppliers to Tesla, which is a leader in the automotive industry, making up nearly half of its market value. They are preparing for a bigger role if Tesla expands into India, as reported by media sources.

These companies have discussed manufacturing parts like castings, forgings, electronics and other items for Tesla. Tata Group companies are understood to have agreements with Tesla, with a share in the nearly $2 billion worth of Indian supplies to the US carmaker in FY24. Tesla has also begun talks with current suppliers to explore setting up operations closer to its manufacturing bases to strengthen its supply chain.

For now, these Tata companies will continue working globally with Tesla, but the decision on whether Tesla will manufacture locally or contract manufacturing in India will impact future steps.

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Over the years, many Indian firms have been supplying components to Tesla, including Samvardhana Motherson, Suprajit Engineering, Sona BLW Precision Forgings, Varroc Engineering, Bharat Forge, and Sandhar Technologies.

Within Tata Group, Tata AutoComp provides engineering products, Tata Technologies offers product lifecycle management, and TCS supplies circuit-board technologies. Tata Electronics is expected to provide chips and vehicle control elements, including printed circuit board assemblies for battery management systems, motor controllers and door controls.

Following a meeting between Elon Musk and Prime Minister Narendra Modi in Washington, Tesla has increased its hiring efforts in India, posting senior positions in Delhi and Mumbai, and reportedly finalizing showroom spaces in both cities.

For now, Tesla will need to sell its imported cars in India, which could be subject to duties as high as 110% if it does not comply with India's new electric vehicle (EV) policy. Under this policy, 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 duty exemption, manufacturers must invest at least Rs 4150 crore (around $500 million) in local operations and meet a turnover of Rs 2500 crore by the second year. Additionally, only 5% of this investment can go toward EV charging infrastructure.

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