To strengthen the Make in India Initiative and enable Indian consumers to benefit from cutting-edge technology, the Indian government, in March 2024, reduced the import duty on electric vehicles (EVs) from the existing 70-100% to 15% for a span of five years. This strategic move aims to attract foreign automakers, with a particular focus on encouraging Tesla to establish manufacturing units in India and bolster the growth of EVs.
Under the new policy, companies can import up to 40,000 electric vehicles annually, subject to a 15% import tax. To avail of this incentive, companies are required to invest a minimum of Rs 4,150 crore or $500 million in India within three years and adhere to specific localization criteria.
Tesla currently purchases approximately $100 million worth of steering wheels and other parts from India. According to reports, Tesla plans to increase its imports of auto components from India, aiming to raise the amount from $1 billion in the fiscal year 2022-2023 to $1.9 billion in 2023-2024.
Elon Musk, CEO of Tesla and SpaceX, is set to visit India on April 21 and 22, where he will meet with Prime Minister Narendra Modi. During his visit, Musk is expected to make several significant announcements, including the launch of the Starlink service.
According to reports, Tesla is considering investing up to $3 billion to establish a factory for manufacturing entry-level electric cars locally. A team from the US is currently scouting potential sites for the factory. The entry-level cars, speculated to be the Model 2, are expected to be priced at around Rs 25 lakh in India.
In a recent development, Tesla, the world’s leading automotive company, has forged a strategic partnership with Tata Electronics to source semiconductor chips for its global operations.
According to Bloomberg’s report, Telsa has collaborated with several automotive suppliers, including Samvardhana Motherson International, Suprajit Engineering, Sona BLQ Precision Forgings, Varroc Engineering, and Bosch Ltd.
Here are 7 stocks from India that supply auto components to Tesla.
Sandhar Technologies Limited
Sandhar Technologies specializes in manufacturing and assembling a wide range of automotive components, including locks, aluminum die-casting parts, sheet metal components, cabins, and mirrors. The company serves a prestigious clientele that includes Royal Enfield, TVS, Honda, Ashok Leyland, Suzuki, Mahindra, JCB, and Caterpillar.
Notably, Sandhar Technologies has produced two components for the wiper system assembly of the Tesla Model 3. Since this initial collaboration, the company has continued to manufacture various components for Tesla, either directly or through technical partnerships.
Sundram Fasteners Ltd
Sundram Fasteners, a subsidiary of the TVS Group, specializes in manufacturing critical, high-precision components including fasteners, gear blanks, turbine and output shafts, oil pumps, radiator caps, as well as rotors and gears.
The company serves prominent original equipment manufacturers (OEMs) like General Motors (GM), John Deere, Daimler Chrysler, and Cummins.
In 2017, Sundram Fasteners secured an order from Tesla to provide essential components for gear transmissions and equivalent radiator caps. Among the products supplied to Tesla are rotator caps, bevel gears, and surge tank caps.
Suprajit Engineering Ltd
Suprajit Engineering is one of the largest suppliers of mechanical cables to domestic two-wheelers and passenger vehicles. It also supplies the aftermarket and export markets.
Suprajit Engineering started manufacturing two components for the wiper system assembly for the Tesla Model 3. Since then, the company has been manufacturing various components for Tesla directly or through technical collaborations.
Varroc Engineering Ltd
The company is in the business of designing, manufacturing, and supplying exterior lighting systems, plastic and polymer components, electrical-electronics components, and precision metallic components. They cater to passenger cars, commercial vehicles, and off-highway vehicle OEMs worldwide.
In 2017, Varroc Engineering secured an order from Tesla, to supply the complete lighting system for both the Tesla Model S sedan and the Tesla Model X crossover.
Since this milestone, the company has received numerous orders from Tesla. Currently, Varroc Engineering remains a prominent choice for Tesla’s potential manufacturing ventures in India.
The company has a robust client base in India, serving esteemed brands such as Bajaj, Honda, and India Yamaha. Globally, their clientele includes renowned names like Ford, Jaguar Land Rover, Fiat Chrysler Automobiles, Groupe PSA, and Volvo.
SKF India Ltd
SKF India is a prominent provider of bearings, seals, mechatronics, and lubrication systems, serving the automotive sector. They cater to the light vehicle, truck, and aftermarket segments.
For Tesla’s electric vehicles, SKF India supplies deep groove ball bearings and ceramic bearings used in electric motors and gearboxes.
Additionally, SKF India offers its products to a wide range of clients across various industries, such as automotive, engineering, and manufacturing. Some of their notable clients include SKF Tech in Ahmedabad and Bangalore, SKF Bearings India in Pune, Ashok Leyland, Tata Motors Ltd, Harsha Engineers Limited, LG Electronics India Pvt. Ltd, Mahindra & Mahindra Ltd, National Fertilizers Limited, NTPC Limited, and Reliance Industries Ltd.
Bharat Forge Ltd
Bharat Forge is engaged in the manufacturing and selling of forged and machined Compoundant for the automobile and industry sector.
The company manufactures a range of components, including crankshafts, connecting rods, emission or after-treatment systems, fuel injection systems, steering knuckles, control arms, rotor shafts, thrust blocks, labyrinth seals, trunnion products, and more.
Since 2017, Bharat Forge has been supplying certain forging parts to Tesla that are not included in the electric powertrain.
Sona BLW Precision Forgings Ltd
Sona BLW Precision Forgings is engaged in designing, manufacturing, and supplying engineered automotive systems and components.
Sona BLW also supplies forged parts that go into making suspension systems for Tesla.
Sona BLW Precision Forgings Ltd serves a wide range of clients, including automotive OEMs in the United States, Europe, India, and China. The company specializes in supplying advanced, essential automotive systems and components, such as differential assemblies, differential gears, conventional and micro-hybrid starter motors, BSG systems, and EV traction motors.
Written by Omkar Chitnis
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