Tata Group companies reportedly become key Tesla suppliers, eye bigger role in India expansion

Tesla has reportedly instructed its suppliers for vehicles sold outside China to relocate component manufacturing out of China and Taiwan as early as next year.

Several Tata Group companies, including Tata AutoComp, Tata Consultancy Services (TCS), Tata Technologies, and Tata Electronics, have emerged as key suppliers to Tesla, which alone accounts for nearly half the global automotive market value. As Tesla explores an India expansion, these companies are positioning themselves for a bigger role, sources told Economic Times.

A senior industry source told ET that Tesla is “readying the supplier base in India,” suggesting that once the EV giant establishes a manufacturing presence in the country, Indian firms will gain from sourcing opportunities. Tesla’s senior global procurement team has reportedly engaged with suppliers, discussing the development and production of critical components such as castings, forgings, electronics, and fabrication items.

Tata’s Role in Tesla’s Evolving Supply Chain

The Tata Group companies mentioned above have global supply agreements with Tesla, contributing to the $2 billion worth of Indian supplies to the automaker in FY24, ET reported. While these agreements currently support Tesla’s international operations, the company’s decision on local production or contract manufacturing in India is expected to shape the next phase of engagement.

Tesla is reportedly in discussions with its suppliers about setting up operations closer to its manufacturing hubs as part of efforts to strengthen its ecosystem, the report added. The automaker is also closely monitoring potential tax concessions and duty waivers as it finalizes its India strategy.

India’s Growing Role in Tesla’s Supply Chain

Tesla is expected to source a range of components from Indian suppliers, including wiring harnesses, electric motors, gearboxes, forged parts, castings, sheet metal, high-value electronics, suspension systems, and electric powertrains, a person familiar with the matter told ET.

Among Tata’s contributions:

• Tata AutoComp supplies engineering products for EVs.
• Tata Technologies provides end-to-end product lifecycle management.
• TCS offers circuit-board technologies.
• Tata Electronics is expected to supply chips and key vehicle control elements, including printed circuit board assemblies for Tesla’s battery management systems, motor controllers, and door controls.

Meanwhile, Tesla has reportedly instructed its suppliers for vehicles sold outside China to relocate component manufacturing out of China and Taiwan as early as next year.

Tesla’s India Manufacturing Plans

As part of its broader India expansion strategy, Tesla is in talks with multiple states, including Rajasthan, Gujarat, Tamil Nadu, Maharashtra, and Telangana, regarding a potential manufacturing base, ET reported. This move could not only strengthen Tesla’s presence in India but also unlock new business opportunities for local suppliers.

Tesla Inc. has not responded to ET’s queries on the matter, while the individual Tata Group companies also declined to comment. Moneyconrol could not independently verify the report.