3 days ago
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New Delhi:
Multinational conglomerate Tata Group has reportedly become a global supplier of billionaire Elon Musk's electric vehicle (EV) company Tesla. Several Tata firms, including Tata Technologies, Tata Consultancy Services (TCS), Tata AutoComp, and Tata Electronics, are now part of Tesla's supply chain, according to a report by The Economic Times (ET).
Per the report, these Tata companies have already signed global agreements with the automaker as essential partners and are providing crucial components and services to Tesla, which represents approximately half of the global automotive industry's market value.
These firms contributed to the approximately $ 2 billion worth of Indian supplies-- including castings, forgings, electronics, and fabrication parts-- to the American automaker in FY24. With the EV maker looking to diversify its supply chain, its sourcing from India is expected to increase.
The Tata group is now positioning itself for expanded opportunities and growing further, especially if Tesla sets up a manufacturing unit in India. Billionaire Musk's company has also initiated conversations with existing Indian suppliers about the possibility of establishing facilities near their manufacturing centres to enhance the supply ecosystem, the ET report said.
"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," a top industry source told ET, requesting anonymity.
The report said that Tesla's Senior procurement executives have been meeting with numerous current suppliers about manufacturing specific components.
Tesla's India Expansion Plans In India
Currently, Tesla is evaluating manufacturing opportunities in India and is closely monitoring government incentives, tax benefits, and potential duty waivers before making a final decision. While the EV maker has not confirmed its manufacturing plans, reports indicate that it is in talks with several states, including Rajasthan, Gujarat, Tamil Nadu, Maharashtra, and Telangana, to explore options for setting up a production facility.
If Tesla moves ahead with its India plans, Tata's role in its supply chain could grow even further. The ET report said the American company has strict non-disclosure agreements with its suppliers, which prevent them from revealing details about their contributions.
However, the sources told ET that Tesla also intends to procure various components from suppliers outside China and Taiwan, including wiring harnesses, electric motors, gearboxes, forged components, castings, sheet metal, sophisticated electronics, suspension systems, electric powertrains, and ball and ceramic bearings.
Tata Group's Supplies To Tesla
Tata AutoComp provides specialised EV engineering products.
Tata Technologies delivers comprehensive product lifecycle management services.
TCS supplies circuit-board technologies.
Tata Electronics provides chips.
The financial daily reported that while these companies within the Tata ecosystem maintain their current global supply arrangements, their future strategic decisions may be influenced by Tesla's ultimate decision regarding local manufacturing or contract manufacturing for the Indian market.
The American EV maker has established partnerships with numerous Indian manufacturers, including prominent names such as Samvardhana Motherson, Suprajit Engineering, Sona BLW Precision Forgings, Varroc Engineering, Bharat Forge, and Sandhar Technologies, for sourcing vital components, but it is likely to source essential vehicle control components from Tata Electronics, including printed circuit board assemblies for Tesla's battery management systems, motor controller units and door control mechanism, the report said.
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