According to The Economic Times, Tesla has signed a strategic deal with India’s VOC giant Tata Electronics. The contracting deal signed a few months ago, stands as a shining indication of Tata Electronic’s loyalty as a global ODM as far as semiconductor suppliers are concerned. Such an agreement attracts attention, too. It shows the rise of interest in United States-based electric car maker Tesla in India.
The collaboration (localization) between Tesla and the Shriram Institute of Chartered Accountants demonstrates Tesla’s desire to meet the demands of India, a giant of the world’s car industries. This development is exactly what would be expected of Elon Musk’s trip to India that is planned where he will touch upon subjects such as the availability of investments, including the production of EVs.
Whilst neither Tesla Motors nor Tata Electronics have presented an official report, they have kept the information, such as the value of the deal and fine details, hidden.
Mr. Ashok Chandak, head of the IESA (India Electronics and Semiconductor Association), declared that, apart from manufacturing in India, it is also very important for Tesla to involve local suppliers in the supply chain. Tesla’s decision to shift at least a portion of its 5nm chip production centers towards Europe signifies the company’s acknowledgement of the need to diversify its market and the call for a domestic semiconductor industry.
The experts in the industry predict that this strategic investment, which is around $2-3 billion, can be used by Tesla for the production of electric and hybrid cars in India with the assistance of the recently changed policies of the government, which reduced import duties on EVs above $35000. Nevertheless, in the case of producing vehicles in India, which would require putting in $500 million in the three-year time frame, Tesla would need to commit.
While Tata Electronics has been picking the best experts in the area from across the world through extensive recruitment exercises, it has also been expanding and deepening its chip business globally. The company, which is already running chip-making factories in Tamil Nadu, Gujarat, and Assam, plans to take its business side by side with India’s technological ecosystem.
The combination of Tesla and Tata initiatives in the semiconductor area can serve as an optimal starting point for further partnership and reaffirm Tesla’s long-term aspirations for penetrating the Indian market.
