Tesla executives to meet govt officials today, tomorrow on firming up supply chain

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As trade tensions between Washington and Beijing show little signs of easing, US companies like Tesla are rapidly realising the need of shifting their focus away from China.

A group of senior executives from Tesla Inc. is planning to visit India on Wednesday and Thursday. C-suite executives and managers from Austin, Texas-based Tesla’s supply chain, are expected to be among the visitors. The purpose of the visit is to engage with federal government officials and explore opportunities to enhance the carmaker's supply chain in the country as it seeks to expand beyond China.

According to the report, the executives are expected to restate Tesla's demand that India reduce import duties on its cars.

The executives are scheduled to hold meetings with government representatives, including officials from the office of prime minister Narendra Modi. The discussions will revolve around the possibility of local sourcing of components for Tesla's car models. The sources have requested anonymity due to the confidential nature of the plans.

This visit could mark a significant turning point in the relationship between India and Tesla, as the electric vehicle manufacturer is yet to establish a notable presence in the country. By engaging with Indian authorities, Tesla aims to pave the way for potential future operations in one of the world's largest automobile markets.

India has been actively promoting the adoption of electric vehicles to combat air pollution and reduce dependence on fossil fuels. With the Indian government's push towards electric mobility, Tesla's entry into the market could offer an attractive proposition for both parties.

Expanding its supply chain in India would not only allow Tesla to diversify its operations away from China but also align with the Indian government's "Make in India" initiative, which encourages domestic manufacturing and sourcing.

The Tesla executives' visit comes as welcome news after Elon Musk had halted Tesla's plans to enter the Indian market last year after a prolonged standoff with the Indian government over reduced tariffs.

As PM Modi works to establish India as a global manufacturing hub, sourcing more products from here could help Tesla win the Indian government's support. The PM Modi administration has so far had a lukewarm relationship with Tesla and had stated there is "no problem" if the automobile company is ready to manufacture electric vehicles in India, but the it must not import automobiles from China.,

Also read: India welcomes Tesla and other EV investments as long as the vehicles are made in India: Nitin Gadkari

However, while the specifics of Tesla's plans for India remain undisclosed, this visit signals the company's intention to establish a stronger foothold in the country and tap into its growing electric vehicle market. As Tesla explores avenues for collaboration and local partnerships, industry observers eagerly await further developments in this budding relationship.

While Tesla has had trouble expanding into India, its rival Mercedes-Benz AG has made efforts to sell locally-made vehicles. The Germany company is placing its bets on India due to the increasing demand for electric vehicles in the country.  Last month, the German luxury carmaker announced its plans to launch four new electric vehicles in India in the next 8-12 months to accelerate its electric mobility drive.

Apple Inc., the iPhone maker, has chosen India as a secondary manufacturing hub and now generates 7% of the world's smartphone output here.

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