Tesla Plans to Source $1.9 Billion of Auto Components from India

Tesla Inc. has announced its plan to procure up to $1.9 billion worth of auto components from India this year, as reported by the Indian government. Last year, the electric carmaker had purchased components worth $1 billion from the country. This news comes after Chief Executive Officer Elon Musk’s meeting with Indian Prime Minister Narendra Modi, where Musk had expressed his intention to make significant investments in India.

The decision to source auto components from India follows a year-long deadlock between Tesla and the Indian government. Elon Musk had previously criticized the country’s high import taxes and electric-vehicle policies, while India had advised Tesla not to sell Chinese-made cars in the country due to political tensions.

Indian Commerce and Industry Minister Piyush Goyal assured that the government aims to provide equal opportunities to all stakeholders and will release a policy after consulting with everyone. In order to promote the production of electric vehicles and benefit from economies of scale, the Indian government wants to attract more investments and increase the output of EVs in the near future. Additionally, the Ministry of Heavy Industries is considering offering incentives for auto component manufacturers, although specific details were not provided.

It is worth noting that India plans to continue providing incentives for electric vehicles even after the second phase of its subsidy program, called Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India, concludes in March.

Sources: Bloomberg