Tesla signs semiconductor deal with Tata Electronics for global operations.
Tesla partners with Tata Electronics for semiconductor chips, eyeing India's EV market.
According to The Economic Times, Tesla has recently entered into a strategic agreement with Tata Electronics to secure semiconductor chips for its global operations. This deal, executed quietly a few months ago, is significant as it establishes Tata Electronics as a reliable supplier for major global clients looking to integrate a crucial segment of their semiconductor supply chain in India. The specifics of the sourcing deal, including its value, remain undisclosed.
This move comes as Tesla aims to enter India, known as the world's fastest-growing major automotive market. Elon Musk, Tesla's driving force, is slated to visit India this month for discussions with Prime Minister Narendra Modi. During this visit, Musk is expected to announce potential investments in India, including commitments to electric vehicle manufacturing facilities. Tesla currently holds the title of the world's most valuable automotive company.
Both Tesla and Tata Electronics, the spearhead of the Tata group's semiconductor manufacturing initiative, have refrained from providing comments, as per the ET report.
Recent reports have suggested Tesla's interest in partnering with local entities to establish its presence in India. Last week, rumours surfaced regarding Tesla's contemplation of a joint venture with Reliance to develop manufacturing facilities within the country.
It's reported that Tesla has allocated $2 billion for its upcoming ventures in India and has been exploring various locations, such as Gujarat and Maharashtra, as potential sites for its plant.
In related news, the Indian government recently approved an Electric Vehicle (EV) policy aimed at positioning the nation as a global manufacturing hub for EVs. The policy mandates a minimum investment of Rs 4,150 crore with no maximum investment limit, aiming to attract investments from reputable global EV manufacturers. Additionally, the policy outlines a three-year timeline for establishing manufacturing facilities in India, commencing commercial production of EVs, and achieving 50% domestic value addition (DVA) within five years at most.
Moreover, the policy specifies that the duty on the total number of EVs permitted for import would be capped at the investment made or Rs 6,484 crore (equivalent to incentives under the PLI scheme), whichever is lower. It further states that a maximum of 40,000 EVs, with an annual cap of no more than 8,000 vehicles, would be allowed if the investment amounts to $800 million or higher, with the option to carry over unused annual import limits.
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