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Tesla India Factory Wants to Introduce Chinese Supply Chain Enterprises

Publish Date: 2023.08.02

According to Reuters, three Indian government insiders with direct knowledge of the situation have revealed that as Tesla considers establishing a factory in India, Tesla hopes to introduce Chinese supply chain enterprises. Indian officials suggest that Tesla follow Apple's example and engage relevant Chinese supply chain companies in joint ventures with local companies.

Tesla has been in negotiations with India for weeks regarding the construction of a factory that may produce affordable electric vehicles worth $24000 for local sales and exports. However, some well-known reasons may complicate Tesla's plan to introduce Chinese component suppliers.

However, if Tesla is to build a factory in India and control the cost of affordable electric vehicles, the presence of Chinese supply chain manufacturers may be crucial. There is no local supplier of battery and other parts in India. Even Tata Motors, the largest electric vehicle manufacturer in India, needs to import batteries from China.

Three Indian officials with direct knowledge of the negotiations stated that during meetings with Indian officials, Tesla executives informed the Indian government that they hoped to have some suppliers from China establish bases locally to strengthen their supply chain.

In response, Indian officials told Tesla that approving Chinese companies to establish sole proprietorships in India may be difficult. However, they have come up with a workaround - suggesting that Tesla follow Apple's example.

After its Chinese supplier found a local joint venture partner in India, Apple has been allowed to introduce its Chinese supplier to India in recent months. Apple's supply chain in India has developed rapidly, including Foxconn, which assembles its iPhone.

Tesla India Factory Wants to Introduce Chinese Supply Chain Enterprises


Image source: Tesla

A government insider pointed out that in recent months, the Indian government has been approving some Chinese suppliers to establish joint venture partnerships with Indian companies on a case by case basis.

However, India is still hesitant to allow Chinese companies, especially automakers, to expand their business in the country. It is reported that last month, BYD informed its Indian partners that it will shelve a new plan to invest $1 billion in producing electric vehicles in India, after this investment proposal was reviewed by the Indian government.

The fourth person directly familiar with Tesla's negotiations in India stated that Tesla is seeking supply chain partners for its Indian factory, but did not specify whether it is a Chinese supplier.

An Indian official stated that for Tesla, combining local Indian and Chinese companies may be beneficial. Tesla has always demanded the establishment of an independent ecosystem for its Chinese suppliers... If there are Indian joint venture partners, these requirements can be approved based on specific circumstances

Tesla, a spokesperson for the Indian government, and the Indian Ministry of Trade did not respond to Reuters' request for comment.

This article is reprinted from Gaishi Automotive Information Network

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