Tesla’s agreement with Tata proves that it is no longer reliant on a single market and is now committed to expand its supply chains
In an effort to grow in the Indian market, Tesla, backed by global business tycoon Elon Musk, has now signed an important contract with Tata Electronics to source chipsets for its international operations. According to an exclusive report by the Economic Times, the deal was finalized a couple of months ago, which puts Tata on top as a dependable supplier for leading global companies.
The deal also positions India on top of the global semiconductor value chain. In terms of market value, Tesla is the leading automotive firm globally, and it is now highly interested in expanding its operations in the country. The company’s CEO and founder, Elon Musk, is expected to visit the country soon this month. Prime Minister Modi will have a detailed meeting with the CEO in regards to the investment plans.
Apart from the meeting, some additional key announcements are expected to be made by Musk, which include a top-notch manufacturing unit to produce electric vehicles at large-scale. Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), stated that Tesla’s agreement with Tata proves that it is no longer reliant on a single market and is now committed to expanding its supply chains.
"The major concern is local sourcing of semiconductors, and this needs improvement in the supply chain as value addition for the industrial and automotive segments is much higher," Chandak told ET. Now, speaking of the growth of electric vehicles in India, around 66 percent growth is expected this year owing to the state backed subsidies that have propelled the demand. Sales of electric cars have already increased in India by two-fold in 2023 due to rising worries over climate change and increasing consumer interest.
