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  • Voltaire Staff

Tesla strikes pacts with Tata Electronics for supply of semicons

Elon Musk-owned Tesla has reportedly struck a deal with Tata Electronics to secure semiconductor chips for its worldwide activities.

The development underscores Tesla's expanding involvement in India beyond merely generating revenue locally.

The agreement, which was quietly executed a few months ago, positions Tata Electronics as a supplier for leading global clients seeking to establish a vital part of their semiconductor supply chain in India, according to a report by ET.

Musk is set to meet with Indian Prime Minister Narendra Modi during his upcoming visit to India this month. It's anticipated that Musk will unveil potential investments in India, including proposals for electric vehicle manufacturing plants.

Tesla, the US based electric vehicle company, currently holds the title of the world's largest automotive company by market value and is eyeing its entry into India - which is the world’s fastest growing automotive market.

Tesla is expected to invest around $2-3 billion in India.

Tata Electronics has set up semiconductor manufacturing facilities in Hosur (Tamil Nadu), Dholera (Gujarat), and Assam, with plans for further expansion to create a comprehensive supply chain in India. So far, Tata Electronics has invested $14 billion in its operations.

Recent policy changes have allowed automakers to import electric vehicles priced above $35,000 at a lower import duty rate of 15 per cent.

The concession however comes with a condition that automakers must pledge to invest $500 million within three years to set up manufacturing plants in India.

Tesla is expected to focus on introducing high-end electric models first, but it's also looking into the possibility of producing entry-level electric vehicles locally.


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