In a bid to lure Tesla to India, states like Gujarat and Tamil Nadu have invited several component suppliers of the EV maker as it usually manufactures near its suppliers to reduce transportation costs, according to a media report.
While the efforts by the central government continue to attract US automaker Tesla, state governments like Gujarat and Tamil Nadu are taking a ‘wider net’ approach by trying to woo Tesla’s suppliers, believing that Tesla is likely to establish operations where its supply chain is robust, reported one of India's business daily.
Earlier this year, Tesla’s much-awaited entry into India was indefinitely delayed. According to the report, three component suppliers of Tesla and other automakers recently visited Gujarat, while two European suppliers are looking to expand operations in Tamil Nadu.
Currently, the southern state, known for its automotive and electronics manufacturing prowess, already houses some of Tesla’s suppliers.
The states hope that the move will lure Tesla, as it likely manufactures near its supplier ecosystem to accelerate production and save transportation costs and time.
Tesla has partnerships with China’s BYD and CATL for batteries and with Panasonic and LG Energy in the USA.
Tesla’s supply chain is complex, with partnerships with multiple Tier-I and Tier-II suppliers worldwide, ensuring the on-time delivery of quality products. They do not exclusively serve Tesla but provide components to various other companies.
According to an expert cited by the report, the decreasing dependency of US manufacturers on China has positioned India as a reliable partner to meet growing demands.
If Tesla enters the Indian market, it will use its Indian supply chain partners to reduce production costs, manage supply chain risks, and meet local sourcing regulations, the expert said.
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