A group of Tesla’s top executives plans to visit India this week to meet with federal government officials in a bid to deepen the automaker’s supply chain in the country while pushing to diversify away from China. Executives plan to meet with government representatives, including from Prime Minister Narendra Modi’s office, to discuss local sourcing of parts for Tesla models, people familiar with the matter said. They spoke on condition of anonymity because the plans have not been made public.
The visit could represent a thaw in relations between India and Tesla, which has yet to enter India in a meaningful way. Chief Executive Elon Musk has criticized India’s high import taxes and its electric vehicle policy, while India has advised Tesla not to sell cars made in India by its political rival China.
Visitors will include C-suite executives and managers from Tesla’s supply chain, production and business development teams in Austin, Texas. Executives are expected to reiterate Tesla’s demand that India cut import taxes on its vehicles, people familiar with the matter said.
Tesla did not immediately respond to an email sent outside U.S. business hours to a press address on its website. Representatives from the Ministry of Road Transport and Highways did not respond to requests for comment.
Sourcing more products from India could help Tesla win over Modi as he seeks to turn the country into a global manufacturing hub. Modi’s government has so far given Tesla a cold shoulder, asking it to avoid selling vehicles assembled at its Shanghai factory. India has a long-standing border dispute with neighboring China.
While Tesla is finding it difficult to break into the Indian market, its global rivals such as Mercedes-Benz have taken steps to sell locally assembled cars. They are betting on growing demand for electric vehicles in the world’s most populous country and a car market with high growth potential.
To be sure, Tesla is far from considering India as an assembly base for its pricey cars. Musk said his company would not set up a manufacturing facility anywhere that would not allow it to sell and service vehicles first.
But with trade tensions between Washington and Beijing showing no sign of easing, U.S. companies including Tesla are increasingly aware of the importance of pivoting their business away from China.
Tesla could follow Apple’s lead. The iPhone maker has established India as an alternative manufacturing base, with the South Asian country now accounting for 7% of its global smartphone output.
© 2023 Bloomberg
