Tesla has a chip supply deal in place with Tata
Reports say that Tesla has agreed a 'secret deal' with Tata Electronics to lock down the global supply of semiconductors for its EVs.
According to The Economic Times, the two firms made the agreement some time ago fuelled by Tesla's desire to diversify its supply chain and establish a significant presence in India. The report says Tesla has earmarked USD 2 billion for its upcoming ventures in India and has been exploring various locations, including Gujarat and Maharashtra, as potential sites for its plant.
Tesla has understandable reasons to target India, which is home to more than a billion people and a rapidly growing economy. A report by Counterpoint Research forecast that EV sales in India are expected to rise 66% this year after nearly doubling in 2023.
The Indian government is also actively supporting the domestic chip market with subsidies and grants. Just weeks ago, it rubber stamped a USD 15.2 billion budget to build three new semiconductor plants, including the country's first 12-inch wafer fab – a joint project run by Tata Group and Taiwan’s Power Chip.
Tata is one of India's most important chip companies. It has existing semiconductor manufacturing facilities in Hosur, Dholera and Assam and the has plans to expand its capacity further.
The news of the Tesla/Tata deals comes days ahead of Tesla CEO Elon Musk's visit to India to meet Prime Minister Narendra Modi.
