EXCLUSIVE: Elon Musk's Tesla To Source Components Worth 'Billions' From India - These Firms To Benefit

Tesla Inc. is reportedly accelerating its efforts to source components from India for its upcoming compact Battery Electric Vehicle (BEV), as per a source. This strategic move aligns with Elong Musk-led firm's broader localization strategy, reducing production costs while strengthening its presence in key global markets.

According to well-informed sources, Tesla is engaging with Indian suppliers for critical components such as interior and exterior parts, automotive electronics, etc., for its upcoming model, which is speculated to be a compact crossover priced at around €35,000 in Europe. 

"India’s growing manufacturing ecosystem and cost advantages make it an attractive hub for Tesla’s supply chain. The quantity of parts sourced for its upcoming affordable electric car would also be more due to the higher projected output. That could eventually translate to sourcing of components worth billion of euros for a single EV project," said a source privy to the development. 

Project Redwood kicks off

Tesla is reportedly developing a battery-driven model under the codename "Redwood," which is expected to be rolled out by 2025. Widely speculated to be called the Model 2 or Model Q, it will be its most affordable model for global  markets. 

Another source requesting anonymity stated that Tesla will be ramping up its parts sourcing from its existing tier-1 manufacturers like Sona BLW Precision Forgings, Hindalco Industries, Sundram Fasteners Ltd, Suprajit Engineering, Sandhar Technologies Limited, Samvardhana Motherson International, Bosch India, Tata AutoComp Systems, Varroc Engineering, etc. 

An emailed questionnaire sent by Republic Business to Tesla spokesperson remained unanswered till the time the story was published. None of the homegrown auto component firms could be contacted as Tesla has a Non-Disclosure Agreement with its vendors.

China+1 strategy coming into play
Industry observers reckon that Tesla’s collaboration with Indian suppliers represents a significant milestone in the country’s automotive industry. By sourcing components from India, Tesla is not only diversifying its supply chain but also reducing costs and enhancing supply chain resilience. 

"The China+1 strategy, coupled with Indian automotive component suppliers’ investments in advanced technologies, positions India as a strategic partner for Tesla Motors to scale its imports, stated , Puneet Gupta, director at S&P Global Mobility, told Republic Business. 

He went on to add, "Indian auto component manufacturers, already well-established in global exports, are now channeling investments into EV-specific components. This shift is poised to bolster their presence in international markets and solidify India’s role in the evolving global EV supply chain."