Tata Group and Tesla: A Silent Partnership

Several Tata Group companies have quietly established themselves as global suppliers to Elon Musk-led Tesla, marking a significant step in the electric vehicle (EV) industry. This collaboration includes Tata AutoComp, Tata Consultancy Services, Tata Technologies, and Tata Electronics, positioning them for expanded opportunities should Tesla establish operations in India.

Strategic Importance for Tesla

These Tata Group companies have secured global agreements with Tesla, contributing to the approximately $2-billion worth of Indian supplies to the American electric vehicle manufacturer in FY24. Tesla has initiated conversations with existing suppliers about establishing facilities near their manufacturing centres to enhance the supply ecosystem.

Future Prospects and Strategic Decisions

Currently, India serves primarily as a development and supply hub for Tesla's operations. Tesla intends to procure various components from suppliers outside China and Taiwan, including wiring harnesses, electric motors, and sophisticated electronics. The future strategic decisions of Tata enterprises may be influenced by Tesla's choice regarding local manufacturing or contract manufacturing for the Indian market.

Enhancing the Supply Chain

Following the supply chain challenges during the Covid-19 crisis, Tesla has implemented a strategy to reduce its dependence on China by sourcing electronic, electrical, and mechanical components from alternative locations. The company is currently engaged in discussions with multiple Indian states regarding the establishment of manufacturing facilities in India, aiming to bolster its presence and create additional prospects for Indian suppliers.