Tesla turns to Made In India parts, diversifies suppliers from China

  • Industry News
  • Nov 20,23
Key players in this supply chain include Sona Comstar, the largest Indian supplier for Tesla, along with Graziano Trasmissioni India (a DANA group company), Tata AutoComp Systems, CISWW Engineering India, and Bharat Forge.
Tesla turns to Made In India parts, diversifies suppliers from China

Indian auto parts manufacturers are becoming favoured suppliers for Tesla Inc as the company seeks to reduce its reliance on China, according to sources familiar with the matter. Tesla is reportedly willing to pay a premium for these components. The electric car giant currently procures various India-made parts, ranging from small plastic components to complex differential systems and wheel hubs. Industry data from Mint indicates that, in the 2022-23 period, 30 component manufacturers, including Indian firms and multinational companies with operations in India, exported parts valued at $135-150 million to Tesla. However, this figure is expected to increase when considering additional sales by Tier-2 and Tier-3 suppliers.

Key players in this supply chain include Sona Comstar, the largest Indian supplier for Tesla, along with Graziano Trasmissioni India (a DANA group company), Tata AutoComp Systems, CISWW Engineering India, and Bharat Forge. The details of these suppliers' business relationships with Tesla remain undisclosed due to non-disclosure agreements.

In September, India's commerce and industry minister, Piyush Goyal, stated that Tesla had sourced nearly $1 billion worth of auto parts from India in 2022 and was on track to double this amount in the following year. Goyal's recent visit to Tesla's manufacturing facility in Fremont, California, coincided with discussions about a potential new national electric vehicle (EV) policy in India, which could include reduced import duties on EVs if foreign automakers like Tesla commit to local manufacturing.

Tesla's move to diversify its supplier base away from China is driven by a desire to mitigate supply chain risks amid ongoing tensions between the U.S. and China. While China has lower raw material costs, Tesla views India as a quality alternative, even if it involves slightly higher prices. The company's outsourcing to India includes complex machine parts, reflecting a broader trend of sourcing from countries like India, Vietnam, and Mexico, especially for commodity parts.

The Indian government is actively encouraging global EV manufacturers to invest in the country, positioning India as a hub for talent and manufacturing in green mobility solutions. Reports suggest that a new national EV policy may lead to lower import duties for EVs up to a specified price level, incentivising companies to engage in local manufacturing within the next few years. This aligns with Tesla's interest in targeting the mass-premium segment of passenger EVs in India.

Related Stories

Smart Manufacturing
How MSMEs will play a key role in the development of Indian manufacturing sector

How MSMEs will play a key role in the development of Indian manufacturing sector

Setting up a business in India is futuristic, makes a lot of sense, and, for foreign companies, connecting with the Indian MSME and helping it grow is a sure way to success, says R Jayaraman.

Read more
Policy Regulation
China+1 strategy: India's mixed gains

China+1 strategy: India's mixed gains

India’s strategic response to these challenges could determine the extent of its long-term gains from the evolving global supply chain realignments.

Read more
Automation & Robotics
Delta Electronics will soon introduce cobots in India: Manish Walia

Delta Electronics will soon introduce cobots in India: Manish Walia

In this interview with Rakesh Rao, Manish Walia, Head - Industrial Automation, Delta Electronics India, explains the importance of advanced automation and robotics to enhance the operational efficie..

Read more

Related Products

Tata Motors unveils facilities for development of Hydrogen propulsion tech

AUTO COMPONENTS & ACCESSORIES

Tata Motors, India?s largest automobile company, unveiled two state-of-the-art & new-age R&D facilities for meeting its mission of offering sustainable mobility solutions. The unveilings constitute of Read more

Request a Quote

Tata Motors plans petrol powertrain for Harrier and Safari SUVs

AUTO COMPONENTS & ACCESSORIES

Tata Motors is in the process of developing a new petrol powertrain for its premium sports utility vehicles, the Harrier and Safari, as confirmed by a senior company official. Currently, these models Read more

Request a Quote

Electric Vehicle Charger

AUTO COMPONENTS & ACCESSORIES

RRT Electro is engaged in manufacturing of customized Power Electronic Products over two decades having capability to Design, Develop, Prototyping, Regulatory Compliance testing & Certification, Manuf Read more

Request a Quote

Hi There!

Now get regular updates from IPF Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Industrial News on Whatsapp! Enjoy

+91 84228 74016