Tesla's strategic deal with Tata Electronics to procure semiconductor chips for its global operations signifies the electric carmaker's growing interest in India beyond local revenue generation, according to officials familiar with the matter.
The agreement, executed quietly a few months ago, positions Tata Electronics as a reliable supplier for top-tier global clients looking to establish a crucial segment of their semiconductor value chain in India.
As Tesla eyes entry into India, the world's fastest-growing major automotive market, Elon Musk, the company's CEO, is reportedly scheduled to visit the country this month for a meeting with Prime Minister Narendra Modi. Musk's visit is expected to include announcements of potential investments in India, including commitments to EV manufacturing facilities. Tesla currently holds the title of the world's largest automotive company by market value.
Neither Tesla nor Tata Electronics commented on the specifics of the deal, including its value or other details.
Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), highlighted Tesla's move to create a local ecosystem of suppliers for electronics and subsystems, indicating the company's desire to diversify its supply chain beyond any single market. He noted that improving the local sourcing of semiconductors is crucial, as it would enhance the supply chain and increase value addition, particularly for the industrial and automotive sectors.
