Tesla has inked a strategic agreement with Tata Electronics to procure semiconductor chips for its global operations.
According to an ET report, this agreement, executed discreetly a few months ago, carries significant implications as it positions Tata Electronics as a supplier for leading global clients looking to establish a crucial segment of their semiconductor value chain in India.
Tesla is eager to enter India, the world’s fastest-expanding automotive market. Tesla promoter Elon Musk is also visiting India this April for a meeting with Prime Minister Narendra Modi. Musk is expected to announce potential Indian investments, including a commitment of funds toward Electric Vehicle manufacturing facilities.
India Electronics and Semiconductor Association’s (IESA) president Ashok Chandak stated that Tesla’s move to establish a local ecosystem of suppliers for electronics and subsystems indicates its aim to reduce dependency on a single market.
However, the major concern is the local sourcing of semiconductors. “This needs improvement in the supply chain as value addition for the industrial and automotive segments is much higher,” Chandak told ET.
Most industry experts estimate that Tesla will invest about $2 Bn – $3 Bn in India to manufacture electric cars. The development comes a month after the Centre approved a new policy under which EV companies would have to pay lower duty on imports of EVs if they agree to set up manufacturing facilities in the country. rewrite this
