EV giant Tesla has signed a strategic deal with Tata Electronics to procure semiconductor chips for its global operations, as reported by The Economic Times. As per the report citing official sources aware of the development, the deal was signed quietly a few months ago. However, both Tesla and Tata Electronics have not commented on these developments. Consequently, specific details regarding the deal, such as its value and terms, remain undisclosed.
The development is seen as a part of Tesla’s strategy to diversify its supply chain and establish a significant presence in India. The US-based EV giant has been eyeing India for a long time as the country is known as the world’s fastest-growing major car market.
After the COVID-19 pandemic, Tesla has been diversifying its options for sourcing components beyond China, particularly for critical electronic, electrical, and mechanical parts. While the company typically keeps its suppliers secretive, it manufactures certain components like electric motors, battery packs, and chargers in-house, while relying on global suppliers for sub-assemblies and other parts.
In recent weeks, Tesla has reportedly accelerated its efforts to establish an Electronic Vehicle (EV) manufacturing plant in India with an estimated investment of around $2-$3 billion.
On 3rd April, OpIndia reported that billionaire Elon Musk-led Tesla Inc. has started its search to identify sites for building its proposed $2 billion to $3 billion Electric car plant in India. The company is focusing on states like Maharashtra and Gujarat because the coastal states can assist it in facilitating exports. Later, reports emerged that Tesla is in talks with Mukesh Ambani-led Reliance for its proposed EV plant in India, particularly in Maharashtra.
Consequently, Musk confirmed reports that he will be coming to India later this month to meet Prime Minister Narendra Modi. He will meet with PM Modi on April 21 and 22. It is expected that he will make major announcements including the launch of the Starlink service in the country and plans to invest between $2 billion to $3 billion for the EV plant.
A big win for Tata Electronics
Meanwhile, a semiconductor deal with Tesla holds great significance for Tata Electronics, which is leading the Tata group’s foray into semiconductor manufacturing. The deal puts Tata Electronics in the spotlight as a dependable supplier for major global clients eyeing a crucial part of their semiconductor setup in India.
Moreover, Tata Electronics has expanded its team by recruiting 50-60 highly skilled expatriates in recent months. These individuals bring with them extensive expertise in semiconductor technology, strategic planning, and design, which will enhance the company’s business operations. As per ET report, Randhir Thakur, chief executive and managing director of Tata Electronics has been instrumental in roping in some top talent. He was named CEO in April 2023 and is an Intel Foundry Services veteran.
Tata Electronics has established semiconductor manufacturing facilities in Hosur (Tamil Nadu), Dholera (Gujarat), and Assam, with ambitious expansion plans aimed at creating a comprehensive and interconnected supply system across the country.
Officials stated that it has invested $14 billion to date in the business.
Top officials close to the development said Tata Electronics has made significant investments in indigenous technology development for all these platforms and has put together a team with 1,000+ years of global domain experience to drive this project.
