Elon Musk’s Tesla has told its Indian suppliers that the electric vehicle company’s policy to procure from local firms will remain unchanged, irrespective of the tariffs the United States may impose on India-made auto components, sources have told Moneycontrol.
The assurance bodes well for numerous Indian auto component manufacturers who export to Tesla at a time when uncertainty hangs over India-US trade deal and American President Donald Trump doubling down on tariff threats.
“The companies have been told they will continue business as usual, irrespective of the trade deal between India and the US. This provides immense respite to some of the Indian manufacturers who have be worried about shift in supply chains as a result of the Trump tariffs,” one of the sources cited above said.
According to a Bloomberg supplier list, Sona BLW and Samvardhana Motherson Sumi are among those supplying parts to Tesla. Moneycontrol could not independently ascertain the list of suppliers.
In its conversation with several Indian partners over the last two weeks, the company has reiterated that it seeks suppliers who have expertise in producing cutting-edge components. The Texas- based EV maker also told the suppliers that the company adopts a long-term strategy with partners across the globe, which will remain unchanged irrespective of tariffs.
Emails sent to Tesla, Sona BLW and Samvardhana Motherson Sumi remained unanswered.
The development assumes significance as India still awaits the signing of a mini-trade deal, the scaled-down version of the first tranche of a bilateral trade agreement (BTA), with the US to escape the reciprocal tariffs imposed by US President Donald Trump.
On April 2, Trump announced sweeping tariffs on trading partners, including India. Those duties that would have hit sectors, including pharma and auto component makers, hard. The duties were later paused for 90 days and the deadline has now been extended to July 31, enabling countries to conclude trade deals with the US.
“Keeping Indian supply chains unchanged makes a lot of sense for Tesla, especially since India is a market for which the automaker has big plans Global supply chains take years to build and cannot be moved instantly from one country to another due to higher tariffs,” a second person said.
Tesla plans to enter the Indian car market this year, initially importing cars from its Berlin factory. The company is also learnt to have leased a 4,000 square foot office space in Mumbai for a showroom.
High import duties on cars has been a hurdle for Tesla’s India entry since it still doesn’t have big enough local market to be able to manufacture in the country.
Until recently, Tesla was the largest manufacturer of EVs in the world. In 2024, China’s BYD overtook Tesla in sales. BYD produced 4 million EVs in 2024 compared to Tesla’s 1.8 million, pushing the American firm to the second spot.
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