Tesla plans to source up to $1.9 billion in components from India this year

Tesla is set to significantly boost its collaboration with Indian suppliers, with plans to source components worth nearly $2 billion from the country, according to Union Minister Piyush Goyal.

Speaking at the 63rd Annual Session of the Automobile Component Manufacturers Association of India, Goyal revealed that Tesla is set to source automotive components worth between $1.7 and $1.9 billion from India this year. This marks a significant increase compared to the approximately $1 billion worth of auto parts that Tesla procured from India in 2022.

“Tesla already last year bought $1 billion of components from all of you sitting here. This year their target is nearly $1.7 billion or $1.9 billion,” Goyal said. (via Reuters)

A Gigafactory in India seemed like it was no longer going to happen after years of negotiations over high import taxes ended in a stalemate last year, with neither side seemingly willing to budge on their demands. Tesla wanted the reduce or eliminate the import taxes on electric vehicles (EVs), as high as 100%, while India said they were not willing to lower import taxes until Tesla opened a factory in the country.

Those talks resumed earlier this year, followed by an in-person meeting between CEO Elon Musk and Prime Minister Narendra Modi. That meeting appeared to be a successful one, with Musk saying afterwards his company plans to make a significant investment in India “as soon as humanly possible.”

Tesla reportedly then began negotiating to construct a factory in India with an annual production capacity of up to 500,000 electric vehicles (EVs). While which specific vehicle models will be built at the factory have not been disclosed, it was suggested that Giga India would primarily focus on manufacturing Tesla’s next-generation platform, that will now first launch at Giga Texas, instead of Giga Mexico.

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