Industry sources reveal that Tata AutoComp Systems, Tata Consultancy Services (TCS), Tata Technologies, and Tata Electronics have secured key supply roles with Tesla, contributing to around $2 billion in components sourced from Indian firms in the financial year 2024.
While Tesla hasn’t confirmed intentions to manufacture in India, its procurement teams are actively engaging with both current and potential suppliers about future partnerships. Discussions have explored the possibility of establishing local facilities near Tesla’s planned manufacturing hubs if it decides to enter the Indian market.
Currently, India primarily serves as a development and export hub for Tesla’s global operations. However, insiders indicate that Tesla aims to diversify its sourcing away from China and Taiwan, particularly for essential components such as wiring harnesses, electric motors, gearboxes, precision-forged parts, suspension systems, powertrains, and complex electronic assemblies.
Tata AutoComp focuses on EV-specific engineered components, Tata Technologies offers comprehensive product lifecycle solutions, TCS provides circuit board design and related tech services, while Tata Electronics is anticipated to produce semiconductor components once its facilities are up and running.
Analysts suggest that these partnerships position the Tata Group for increased opportunities, especially if Tesla moves forward with manufacturing in India. The decision will likely be influenced by India’s policy landscape, including tax incentives and import duty exemptions.
Additionally, Tesla is reportedly engaging other Indian suppliers such as Bharat Forge, Sona BLW Precision Forgings, Suprajit Engineering, Varroc Engineering, Samvardhana Motherson, and Sandhar Technologies for critical vehicle components. Together, Indian firms are estimated to provide between $1.7 and $1.9 billion worth of parts to Tesla in FY24, a figure expected to rise in the current fiscal year.
In response to global supply chain disruptions during the COVID-19 pandemic, Tesla has been working to lessen its reliance on Chinese suppliers by expanding its sourcing network.
At the same time, Tesla is exploring the establishment of manufacturing operations in several Indian states, including Rajasthan, Gujarat, Maharashtra, Tamil Nadu, and Telangana. Although no formal announcement has been made, such a move could significantly amplify Tesla’s footprint in India and present new opportunities for the local supply chain.
Despite Tesla’s usual discretion regarding supplier relationships due to confidentiality agreements, industry signals strongly suggest that India is poised to play a crucial role in Tesla’s global strategy—both as a vital supplier and, potentially, as a key manufacturing base in the near future.
