Tesla holds talks with govt over bringing its supply chain to India

Tesla chief executive Elon Musk.

Electric vehicle (EV) maker Tesla has held talks with the Indian government, exploring the possibility of bringing its auto parts and electronics chain to India and getting sops and tax breaks in the process.

The US-headquartered electric vehicle maker has shown interest in bringing its own supply chain ecosystem to India, even as the government has asked the company to assess the existing auto components supply chain in the country, the Economic Times reported on July 13.

Moneycontrol couldn't verify the report independently.

After meeting PM Modi during his trip to the US last month, Tesla chief executive Elon Musk had said: "He (PM Modi) really cares about India because he's pushing us to make significant investments in India, which is something we intend to do."

Musk also called himself a "fan of Mr Modi" and said that India had "more promise than any large country in the world".

Also Read: Tesla's manufacturing presence worldwide

“We asked them about their specific needs and also urged them to consider sourcing their needs from the Indian ecosystem,” a senior government official told the financial daily on condition of anonymity.

“But these companies have a well-oiled system of their suppliers. These are initial talks so we are hopeful of making some headway,” the official pointed out.

Further, Tesla US and Tesla India executives sought to know the structure of sops the company and its partners are likely to get to bring their manufacturing unit to India along with the supportive ecosystem, the report mentioned.

Also Read: Tesla said to be planning India’s integration in global component supply chains

Tesla executives held discussions with senior Indian officials and ministers in May this year on establishing a manufacturing base for cars and batteries in India. The world's largest electric car maker shelved its India entry plans because of high import tax structures.

Also Read: Tesla held talks with India on auto incentives, battery making: Report

India’s auto components industry, which accounts for 2.3 percent of the country’s GDP, is set to become the third-largest globally by 2025, according to the government. Tesla already buys about $100 million worth of steering wheel and other parts from India.