Tesla Plans To Source US$1.9bil Worth Of Auto Parts From India

Photo: Bloomberg

Tesla Inc plans to source components worth $1.7-$1.9 billion from India, and has already sourced parts worth $1 billion, Commerce Minister Piyush Goyal said on Wednesday at an auto conference in New Delhi.

Goyal stated at an event hosted by the Automotive Component Manufacturers Association of India that by 2030, there will be a compulsive economic composition for consumers to buy EVs, and that talks with the European Union are "progressing well" on understanding how the carbon border tax will impact Indian manufacturing. 

According to Reuters, Tesla's senior executives met with the minister last month and expressed an interest in establishing a factory in India to produce a low-cost electric vehicle (EV) priced at $24,000, roughly 25% less than Tesla's current entry-level model, for both the Indian market and export.

"Tesla last year already bought $1 billion worth of components from India... this year their target is $1.7-$1.9 billion," said Goyal.

According to Goyal, the government wants to see more investments and higher output of electric vehicles in the country in the near future in order to reap the benefits of economies of scale.

India is considering incentives for auto component manufacturers, said Hanif Qureshi, joint secretary of the Ministry of Heavy Industries, at the same event.

After the second phase of the subsidy programme, titled Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India, concludes in March, the country will continue to provide incentives for electric vehicles.