In 2023, India is said to have asked Tesla to emulate Apple and let Chinese suppliers set up joint ventures in the country
Tesla in India
According to news on August 2, according to sources quoted by foreign media, India has asked electric car manufacturer Tesla to follow Apple’s approach and let Chinese suppliers needed for the supply chain find joint venture partners in India.
It is reported that Tesla has been negotiating with India about building a local factory for several weeks.
After the project is implemented, the Tesla factory may produce cheap cars worth 24,000 US dollars, exclusively for the Indian market.
Chinese suppliers of components for electric vehicles could be crucial if Tesla is to build a local factory in India and effectively control the cost of cheap electric vehicles.
India has no local suppliers of key components such as batteries, and even Tata Motors, India’s largest electric car maker, imports batteries from the Chinese market.
Three Indian officials with direct knowledge of the talks said that during the meeting, Tesla executives told the Indian side that it wanted some suppliers from China to establish a local base in order to strengthen the supply chain.
Apple in India
Indian officials said that Tesla can follow Apple’s example and let Chinese suppliers find local joint venture partners in India, and introduce Tesla’s Chinese suppliers to the Indian market through the establishment of joint ventures between the two parties.
Apple currently has a fast-growing local supply chain in India, including Foxconn, which assembles iPhones.
India has been approving joint venture partnerships between Chinese suppliers and local Indian companies on a case-by-case basis in recent months, a source said.
Another source with direct knowledge of Tesla’s talks in India said Tesla was looking for a supply chain partner for the Indian factory.
An Indian official said that for Tesla, a joint venture between a local company and a Chinese manufacturer is feasible.
Another Indian official said, “Tesla has been asking for an independent ecosystem for their suppliers, and if there is a local Indian joint venture partner, it can be approved on a case-by-case basis.”
According to previous reports, last year, Tesla hoped to sell electric vehicles in India by importing electric vehicles from the United States and China, and asked to be exempted from local tariffs of up to 100%. But the request was rejected by Indian officials.
Subsequently, Tesla changed its strategy and stated that it would invest and build a factory in India to manufacture and sell electric vehicles while creating local job opportunities.
India is very interested in Tesla’s proposal, and both parties have expressed their positive attitude and willingness.
But at present, Tesla and the Indian government have not yet reached a final agreement.
If Tesla can build a factory in India, it will have a major impact on the Indian auto market and environment.
India, as the third largest auto market in the world after China and the United States, is also an important reason why Tesla has come to invest and build factories.
“Tesla has been asking for a separate ecosystem for their suppliers…if there is a local Indian joint venture partner, it can be approved on a case-by-case basis,” the Indian official said.
Previous news revealed that Tesla plans to build a factory in India with an annual production capacity of 500,000 units, and the price of electric vehicles produced will start at 2 million Indian rupees (about 24,400 U.S. dollars).
Statistics show that India’s new car sales (including commercial vehicles) exceeded 4.7 million last year, surpassing Japan for the first time and becoming the third largest market in the world after China and the United States.
India plans to significantly increase the proportion of electric vehicles in India’s total car sales from the current 1% to 30% by 2030.
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