Tata Becomes Global Supplier for Elon Musk’s Tesla, Braces For Bigger Role in EV Maker’s Entry into India

As Elon Musk's Tesla is eyeing an entry into India's automobile market, several Tata Group companies have become a key global supplier for the global electric vehicle maker. According to an Economic Times report, Tata AutoComp, Tata Consultancy Services, Tata Technologies and Tata Electronics will reportedly become global suppliers to Tesla.

The tie-up would position Tata Group as a major player in Tesla's entry into the Indian market. Till then, the Tata Sons' conglomerate is likely to benefit from Tesla's partnership as the EV maker enjoys a dominant position in the global battery electric vehicle (BEV) market by market share.

Tesla readying supplier base in India

The recent pact has been seen as a precursor to Tesla's entry into the Indian market. Before the EV maker gets all the approval from the Indian government, the company is "readying its supplier base in India," reported ET citing sources.

Tesla's senior officials are exploring opportunities and meeting many of the current suppliers. The companies have also discussed the manufacturing of certain auto parts like castings, forgings, electronics, and fabrication items.

What does Tata Group's pact with Tesla include?

There has been no official information about Tata Group's tie-up with Tesla, hence not much information is available about the deal. Holding a specialisation in EV manufacturing, Tata AutoComp is likely to emerge as a key auto parts supplier for Tesla. Additionally, Tata Technologies will offer end-to-end product for life cycle management. As per ET report, TCS will supply circuit-boards technologies while Tata Electronics will provide chips after a local plant becomes operational. The manufacturing plant can be either oened by Tesla or the two firms may rope in a third-party for plant operations.

Tesla's entry in India

Tesla's entry in India is likely to shake up the current automarket which is dominated by players like MG Motor, Tata, etc. Additionally, Tesla's EVs available in the premium segment will give direct competition to global giants like BMW in India. The global positioning of Elon Musk's electric vehicle company is likely to benefit the company in establishing its market in the country.
Tesla's reputation for innovation and sustainability, will make it an attractive alternative to traditional luxury brands in India and is likely to become a popular choice among Indian millionaires and billionaires.

However, the EV maker's entry in India has remained one of the most anticipated business developments over the past few years. Elon Musk-led firm has made multiple failed attempts to get approval into the Indian markets over the past few years. The company, in 2016, even launched its pre-booking of Model 3 electric vehicle. During that time, many Indians pre-booked the car in 2016 by paying as high as $1,000, but the delivery of these EVs are still awaited.

Elon Musk, in April 2016, had invited Indians to preorder Tesla Model 3, raising speculation about his company's entry into India, but most of the orders by Indian EV enthusiasts remain undelivered till now.

In 2024, Elon Musk had scheduled a visit to India, and there were rumours that he may finalise a deal with the Indian government to start Tesla EVs sale in India. But, at the eleventh hour, Elon Musk postponed his India visit citing preoccupation with urgent business matters.