**Mumbai**: Tata Group has emerged as a global supplier for Tesla, with multiple firms signing agreements to provide crucial components and services. As Tesla explores manufacturing in India, Tata is well-positioned to benefit from increased sourcing opportunities amid growing collaborations in the automotive sector.
Multinational conglomerate Tata Group has reportedly secured its position as a global supplier for Tesla, the electric vehicle (EV) company led by billionaire Elon Musk. According to a report by The Economic Times (ET), several Tata firms, including Tata Technologies, Tata Consultancy Services (TCS), Tata AutoComp, and Tata Electronics, have now signed global agreements with the EV manufacturer as key partners in Tesla’s supply chain.
These Tata companies are involved in providing vital components and services, contributing to an estimated $2 billion worth of Indian supplies for FY24. The components range from castings and forgings to electronics and fabrication parts, highlighting the essential role Tata plays in the broader automotive industry, which represents roughly half of the global market value.
As Tesla seeks to diversify its supply chain, the company’s sourcing from India is poised for growth. The Tata Group is positioning itself to take advantage of expanding opportunities, particularly if Tesla follows through on plans to establish a manufacturing unit in India. The report notes that Tesla has initiated discussions with current Indian suppliers regarding the potential establishment of facilities near their manufacturing centres to bolster the supply ecosystem.
“Tesla is, in a way, readying the supplier base in India…We are very sure that once Tesla starts manufacturing here, Indian suppliers will benefit from sourcing opportunities,” said a top industry source, speaking to The Economic Times on the condition of anonymity.
Tesla’s senior procurement executives have been actively meeting with various existing suppliers to discuss the manufacturing of specific components in India. The company is currently assessing potential manufacturing opportunities, taking into account government incentives, tax benefits, and potential duty waivers before making any decisions.
Although Tesla has not formally confirmed its manufacturing plans in India, reports indicate that it is in discussions with multiple states, including Rajasthan, Gujarat, Tamil Nadu, Maharashtra, and Telangana, to explore suitable locations for a production facility. If Tesla progresses with its plans, the significance of Tata’s role in its supply chain could increase significantly.
Moreover, as per the ET report, details surrounding Tesla’s component sourcing strategies remain largely confidential, thanks to strict non-disclosure agreements with suppliers. Nonetheless, it has been revealed that Tesla aims to procure various components from suppliers outside China and Taiwan, including wiring harnesses, electric motors, gearboxes, forged components, sheet metal, advanced electronics, suspension systems, electric powertrains, and ball and ceramic bearings.
In terms of specific contributions, Tata AutoComp supplies specialised EV engineering products, Tata Technologies focuses on product lifecycle management services, TCS provides circuit-board technologies, and Tata Electronics is responsible for supplying chips. While these companies within the Tata ecosystem maintain their existing global supply arrangements, their strategic decisions going forward may be influenced by any final decisions made by Tesla regarding local manufacturing or contract manufacturing for the Indian market.
Tesla has also established partnerships with various Indian manufacturers, such as Samvardhana Motherson, Suprajit Engineering, Sona BLW Precision Forgings, Varroc Engineering, Bharat Forge, and Sandhar Technologies, for sourcing crucial components. It is expected that Tata Electronics will supply essential vehicle control components, including printed circuit board assemblies for Tesla’s battery management systems, motor controller units, and door control mechanisms.
Source: Noah Wire Services
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