Elon Musk-led Tesla signs strategic deal with Tata Electronics for semiconductor chips: Report
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Elon Musk-led Tesla has reportedly inked a strategic deal with Tata Electronics to acquire semiconductor chips for its global operations. This move highlights Tesla's growing interest in India beyond local revenue generation.
ET exclusively reported that the agreement, executed discreetly a few months ago, positions Tata Electronics as a reliable supplier for top-tier global clients looking to establish a crucial segment of their semiconductor value chain in India.

Tesla, a leading US-based electric vehicle (EV) company, is eyeing entry into India, the world's fastest-growing automotive market. Elon Musk is scheduled to meet with Prime Minister Narendra Modi during his visit to India this month. Musk is expected to announce potential investments in India, including plans for EV manufacturing facilities. Tesla currently holds the title of the world's largest automotive company by market value.

 

Ashok Chandak, the president of the India Electronics and Semiconductor Association (IESA), noted that Tesla's efforts to establish a local supplier ecosystem for electronics and subsystems indicate its commitment to diversifying its supply chain. However, he highlighted the need for improvement in the local semiconductor sourcing ecosystem to support industries like automotive, which require higher value addition in their supply chains.
Tesla is anticipated to invest approximately $2-3 billion in India to manufacture electric cars, reflecting the growing interest in EVs within the country's personal mobility market.

Recent policy adjustments have enabled automakers to import EVs priced above $35,000 at a reduced import duty rate of 15%. However, this privilege is subject to automakers committing to invest $500 million within three years to establish manufacturing facilities in India.

 

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