Tesla (Tesla) is investigating the possibility of setting up a manufacturing plant in India and setting up business here. In such a situation, the Indian government has asked the electric car manufacturer to follow the path of technology giant Apple. So that local firms can be found to partner with any Chinese suppliers involved. This information has been given in the Reuters report. The move comes at a time when the American auto major has been in discussions with the Indian government and officials for several weeks about setting up a local manufacturing plant that will potentially produce the much-anticipated Rs 20 lakh car.
The report claimed that in a meeting with government officials in New Delhi, Tesla executives informed the Indian government that it would like some vendors from China to set up a base locally to boost its supply chain. The report further states that in response, government officials told Tesla that approval for wholly owned Chinese companies in India may be difficult due to the intense scrutiny of Chinese companies since the border clash between the two countries in 2020. It also suggests that Indian officials suggested a solution in which Tesla would emulate Apple's approach. In recent months, the US tech giant has secured approval to bring Chinese suppliers to India after finding a local joint-venture partner.
Tesla and its CEO Elon Musk have shown interest in setting up a local manufacturing plant in India. Also, the company is expected to produce its cheapest car ever in India, which will be sold in the country and also exported to other overseas markets. However, a major concern for Tesla, along with other complications, is bringing Chinese suppliers to India, especially at a time when India-China geopolitical relations are at loggerheads.
Reports claim that Tesla CEO Elon Musk is looking to expand beyond China, the company's biggest overseas base, where regulatory approval for expansion is delayed. India emerged as one of the leading contenders among the options for this, as the country has shown interest in hosting the new Tesla plant in Asia. However, if Tesla has to set up a plant in India and control costs to produce affordable EVs, the issue of Chinese suppliers is going to be critical.
When it comes to electric vehicles, India does not have local suppliers for key EV components such as battery cells. Even India's largest electric car maker Tata Motors is importing its EV battery cells from China. Tesla is reportedly seeking a different ecosystem for its Chinese vendor base. But it can avail of those approvals only on a case-to-case basis if there is an Indian joint-venture partner.
(pc amarujala)
