In a significant move, Tata Group has reportedly become a global supplier for Tesla, the leading electric vehicle (EV) manufacturer. As per a report by The Economic Times (ET), multiple Tata subsidiaries are now integrated into Tesla’s supply network, providing essential components and services to support its operations.
Multiple Tata Group companies, including Tata AutoComp, Tata Consultancy Services (TCS), Tata Technologies, and Tata Electronics, have already signed global agreements with Tesla and are actively delivering components and technological solutions. Their involvement is expected to grow significantly, especially if Tesla establishes a manufacturing facility in India.
As per a news agency report, Tesla’s senior procurement officials have been holding discussions with Indian manufacturers regarding the production of essential vehicle components such as:
Castings
Forgings
Electronics
Fabrication parts
A source cited in the report stated, “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.”
In FY24, Indian companies supplied nearly $2 billion worth of components to Tesla. This figure highlights India's growing role in Tesla’s supply chain as the automaker seeks to diversify its sourcing away from other markets.
Tesla has been actively evaluating India as a potential manufacturing hub but is still assessing government policies, tax incentives, and duty exemptions before making a final investment decision.
The EV giant has engaged in negotiations with multiple Indian states, including:
Rajasthan
Gujarat
Tamil Nadu
Maharashtra
Telangana
While Tesla remains secretive about its manufacturing plans due to strict non-disclosure agreements (NDAs) with suppliers, its increasing partnerships with Indian firms signal a potential long-term commitment to the Indian market.
According to a news agency, several Tata Group companies are playing a crucial role in Tesla’s global supply chain:
Supplying engineering products and components for EVs.
Providing end-to-end product lifecycle management solutions.
Developing advanced circuit-board technologies to enhance Tesla’s EV systems.
Expected to supply semiconductor chips once its local manufacturing plant becomes operational.
Could also be a potential supplier of printed circuit board assemblies (PCBA), critical for Tesla’s battery management systems, motor controllers, and door control units.
These contributions reflect the growing importance of Indian technology and manufacturing firms in the global EV industry.
Tesla has also been expanding its supplier base beyond the Tata Group, sourcing components from over a dozen Indian companies, including:
Samvardhana Motherson
Suprajit Engineering
Sona BLW Precision Forgings
Varroc Engineering
Bharat Forge
Sandhar Technologies
This strategic move aligns with Tesla’s broader effort to reduce dependence on China, especially after supply chain disruptions caused by the COVID-19 pandemic. The company has directed several suppliers to relocate production away from China and Taiwan by 2025.
While Tesla continues to manufacture key EV components like electric motors, battery packs, and chargers in-house, it remains heavily reliant on external suppliers for subassemblies and specialized parts.
In FY24 alone, Tesla sourced between $1.7 billion and $1.9 billion worth of components from Indian companies, demonstrating India's expanding influence in global EV supply networks. Industry experts predict that this sourcing trend will continue to accelerate in FY25, solidifying India's position as a key supplier in Tesla’s global operations.
If Tesla establishes a manufacturing unit in India, Tata Group’s role in its supply chain could expand even further, boosting India’s EV industry and job creation efforts.
The Tata Group’s collaboration with Tesla represents a significant milestone for India’s growing EV ecosystem. With multiple Tata companies already supplying critical components and technology solutions, the potential Tesla manufacturing plant in India could further cement India’s position as a global EV manufacturing hub.
Tesla’s ongoing efforts to reduce its reliance on China, enhance supply chain resilience, and leverage India’s cost-effective manufacturing ecosystem indicate a promising future for the Indian EV sector. If Tesla commits to local production, it could pave the way for increased investment, employment opportunities, and technological advancements in India’s automotive industry.