Several Tata Group companies have quietly become key suppliers for Tesla, which dominates nearly half of the global electric vehicle market. Tata AutoComp, Tata Consultancy Services (TCS), Tata Technologies, and Tata Electronics are already supplying crucial components to Tesla. If Tesla establishes a manufacturing facility in India, these companies will likely see even greater business opportunities.
Moreover, reports confirm that these Tata firms have secured global contracts with Tesla, contributing significantly to India’s $2 billion worth of supplies to the automaker in FY24. To enhance its supply ecosystem, Tesla has also encouraged its existing suppliers to explore setting up manufacturing units near its production centers.
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Tesla Prepares Indian Suppliers for Future Expansion
Tesla is taking proactive steps to develop a strong supplier base in India. A top industry source told ET, “Tesla is, in a way, readying the supplier base in India. We are very sure that once Tesla starts manufacturing here, Indian suppliers will benefit from sourcing opportunities.”
As part of this effort, Tesla’s senior procurement executives have met with multiple suppliers to discuss the production of various components, including:
- Castings and forgings
- Electronics and fabrication materials
- Wiring harnesses
- Electric motors and gearboxes
- Sheet metal components
- Suspension systems
- Electric powertrains
- Ball and ceramic bearings
These discussions indicate that Tesla is actively planning to expand its sourcing beyond China and Taiwan.
Tata Group’s Growing Role in Tesla’s Supply Chain
Each Tata company plays a distinct role in Tesla’s supply network:
- Tata AutoComp supplies advanced EV components.
- Tata Technologies provides end-to-end product lifecycle management services.
- TCS delivers circuit-board technologies.
- Tata Electronics will manufacture semiconductor chips once its production facility becomes operational.
Given these existing contributions, these Tata companies stand to benefit significantly if Tesla moves forward with manufacturing operations in India.
Tesla Evaluates Tax Benefits Before Entering India
In addition to strengthening its supply chain, Tesla is carefully analyzing India’s tax incentives and duty exemptions before making a final decision on local production. Since Tesla enforces strict confidentiality agreements with suppliers, the specifics of component sourcing remain undisclosed.
Nevertheless, reports suggest that Tata Electronics will supply critical vehicle control systems, including printed circuit board assemblies for Tesla’s battery management systems, motor controllers, and door control mechanisms.
Meanwhile, Tesla has expanded its partnerships with several other Indian suppliers, including Samvardhana Motherson, Suprajit Engineering, Sona BLW Precision Forgings, Varroc Engineering, Bharat Forge, and Sandhar Technologies.
Notably, Tesla’s procurement from Indian suppliers reached $1.7-1.9 billion in FY24, and experts predict this figure will continue to rise in FY25.
Tesla Shifts Focus Away from China
Following the supply chain disruptions during the COVID-19 crisis, Tesla has implemented a strategy to reduce its reliance on China. Consequently, the company has instructed suppliers catering to markets outside China to establish production units in other regions, with implementation expected to begin next year.
Although Tesla produces certain key components in-house—such as electric motors, battery packs, and chargers—it continues to rely on international suppliers for subassemblies and specialized components. Moreover, Tesla maintains strict secrecy regarding its supplier relationships.
Tesla in Talks with Multiple Indian States for Manufacturing Facility
In a significant move, Tesla has begun discussions with Rajasthan, Gujarat, Tamil Nadu, Maharashtra, and Telangana to explore potential sites for a manufacturing plant. If Tesla sets up a factory in India, it will not only expand its market presence but also create more business opportunities for Indian suppliers.
As Tesla continues to strengthen its supplier base in India, industry analysts believe that Indian firms will play an increasingly important role in Tesla’s global production strategy.
