Tesla has reportedly entered into a strategic partnership with Tata Electronics to secure semiconductor chips for its global operations, according to sources familiar with the matter as reported by ET. This deal underscores Tesla's growing interest in India beyond its domestic market. The agreement, which was finalized quietly a few months ago, establishes Tata Electronics as a dependable supplier for leading global clients looking to establish a crucial part of their semiconductor supply chain in India.

Elon Musk, the head of Tesla, is expected to visit India soon for discussions with Prime Minister Narendra Modi, potentially announcing investments in electric vehicle (EV) manufacturing facilities. Tesla's interest in India, one of the fastest-growing automotive markets globally, aligns with its strategy to diversify its supply chain beyond China for critical components post-Covid.

Tata Electronics, a part of the Tata Group, has been expanding its semiconductor manufacturing capabilities in several locations across India, including Tamil Nadu, Gujarat, and Assam. The company has attracted experienced talent, including executives from the semiconductor industry, under the leadership of CEO Randhir Thakur, a veteran from Intel Foundry Services.

The partnership between Tesla and Tata Electronics highlights Tesla's commitment to localizing its supply chain and investing in India's burgeoning EV market. Tesla's potential investment in India's EV sector is estimated to be substantial, likely exceeding $2-3 billion. This move could involve local manufacturing of premium electric vehicles to leverage recent policy changes that incentivize EV production in India.

Overall, the collaboration signifies Tesla's strategic interest in India and Tata Electronics' role in supporting Tesla's global supply chain for semiconductor components.