Tesla executives are visiting India this week.that’s why


A group of Tesla Inc executives plans to visit India this week to meet with federal government officials to deepen the automaker’s supply chain in the country while pushing to diversify beyond China. Executives plan to meet with government representatives, including from the office of Prime Minister Narendra Modi, to discuss local sourcing of parts for Tesla models, the people said. The person declined to be named because the plans have not been made public.

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May 16, 2023 at 16:23 pm

A group of Tesla executives is planning a visit to India to meet government officials in Delhi in an attempt to expand the reach of its electric vehicles beyond China. (Associated Press)

The visit could represent a thaw in relations between India and Tesla, which has yet to enter the country 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 the country by its political rival, China.

Visitors will include senior executives and managers from Tesla’s supply chain, production and business development teams based in Austin, Texas. The executives are expected to reiterate Tesla’s demand for India to lower import taxes on its cars, the people said.

Tesla did not immediately respond to an email sent to a news address on its website outside U.S. business hours. Representatives of the Ministry of Road Transport and Highways did not respond to a request for comment.

Sourcing more from India could help Tesla win over Modi as he works to make the country a global manufacturing hub. The Modi government has so far been lukewarm on Tesla, asking it to avoid selling cars assembled at its Shanghai factory. India has long had a border dispute with neighboring China.

While Tesla has found it difficult to break into the Indian market, global rivals such as Mercedes-Benz have taken steps to sell locally assembled vehicles. They are betting on growing demand for electric vehicles in the world’s most populous country and an auto market with high growth potential.

To be sure, Tesla is far from considering India as a base from which to assemble its expensive cars. Musk has said his company will not set up a manufacturing plant anywhere it would not allow its vehicles to be sold and serviced in the first place.

But with trade tensions between Washington and Beijing showing no signs of easing, U.S. companies, including Tesla, are increasingly aware of the importance of moving operations outside of China.

Tesla can learn from Apple’s approach. The iPhone maker has turned to India as an alternative manufacturing base, with the South Asian country now producing 7% of its global smartphone production.

First published date: May 16, 2023 at 16:23 PM CST


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