Tesla Plans to Source More Parts from India

(RightWing.org) – India’s trade minister says US electric car maker Tesla is planning to almost double the amount of parts it buys from his country, a decision that’s probably linked to the company’s efforts to open a factory in the country. Tesla could be hoping that giving Indian manufacturers a bigger share of production could ease the slow process of getting approval to build vehicles there.

On September 13, Indian commerce minister Piyush Goyal told reporters that Tesla, which bought $1 billion worth of car parts from India last year, is planning to increase that to between $1.7 billion and $1.9 billion in 2023. Goyal went on to say “I am convinced that [electric transport] is the future. It is something we must try to attract.”

In August, Indian officials revealed that the country was working on a new policy to attract electric vehicle (EV) manufacturers. Right now it’s very expensive to import EVs; India charges a 100% tariff on cars costing over $40,000, which includes most US-made EVs. Tesla would like to get around that by building the cars in India, for local sale and export. Rumors that Elon Musk would like to build a factory there have been circulating since 2015. An official said there was “an understanding with Tesla’s proposal” and the Indian government was interested, but so far no firm plans have been announced.

Although Tesla is a US company and its main car factory is in Fremont, California, (with a newer one in Austin, Texas) it also builds vehicles in Shanghai, China. China is the company’s second biggest market after the US. With India now the world’s most populous nation, and with a growing middle class, a factory there would make sense, too. However, is buying parts from India taking work away from Americans? That depends on whether Tesla is increasing sales or just reshuffling its supply chains.

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