Tesla Reportedly Signs Semicon Deal with Tata Electronics

Tesla has reportedly signed a strategic agreement with Tata Electronics to source semiconductor chips for its global operations, sources familiar with the matter told to The Economic Times. Ahead of CEO Elon Musk's visit to India this month, this semiconductor deal strengthens Tesla's piquing interest in India beyond just sales and points to potential manufacturing plans.

The discreet deal signed a few months ago positions Tata Electronics as a key supplier for Tesla as the US automaker looks to establish parts of its semiconductor supply chain in India.

Though the financial details of the Tesla-Tata agreement remain undisclosed, industry experts believe the electric vehicle giant is likely to invest at least $2-3 billion in India to set up manufacturing operations. This would potentially include both premium, feature-rich EV models for the Indian market, as well as entry-level electric cars produced locally.

Recent policy changes allow automakers to import EVs above $35,000 at a reduced 15% duty, contingent on $500 million in local manufacturing investments within three years. Tesla may launch premium models initially and make entry-level EVs locally.

Tata Electronics has hired over 50-60 global experts to bolster its growing semiconductor business and is establishing fabrication plants across India with a $14 billion investment so far. The strategic deal with Tesla reflects its ambitions to become a leading chip supplier globally.

Tesla CEO Elon Musk will visit India this month to meet Prime Minister Narendra Modi. He is expected to announce Tesla's investment plans, including in EV production facilities in India.

Per a previous report, Reliance Industries is also in early discussions with Tesla about potentially setting up an EV manufacturing plant in India. Another report by Moneycontrol suggests that the Indian Department of Telecommunications has expedited the process of allocating a license to SpaceX's Starlink satellite internet unit.

(Source)