Tesla executives to visit India this week. Here is why

A group of senior Tesla Inc. executives plan to visit India this week to meet with federal government officials in a newfound bid to deepen the carmaker’s supply chain in the country as it pushes to diversify beyond China. The executives are scheduled to meet with government representatives including those from the office of Prime Minister Narendra Modi to discuss local sourcing of components for Tesla’s models, people familiar with the matter said, declining to be named as the plans are private.

The visit could represent a thaw in the relationship of India and Tesla, which has yet to enter the country in a meaningful way. Chief Executive Officer Elon Musk has criticised India’s high import taxes and its electric-vehicle policies, and India, in turn, has advised Tesla not to sell cars in the country that have been made in China, its political adversary.

The visitors are set to include C-suite executives and managers from Austin, Texas-based Tesla’s supply chain, production and business development teams. The executives are expected to reiterate Tesla’s request for India to cut import taxes on its vehicles, the people said.

Tesla didn’t immediately respond to an email sent to the press address on its website outside of US office hours. A representative for the ministry of road transport and highways didn’t respond to request for a comment.

Sourcing more from India could help Tesla win Modi’s favour as he tries to make the country a global manufacturing hub. Thus far, Modi’s administration has been lukewarm to Tesla, asking it to avoid selling vehicles assembled at its Shanghai factory. India has been engaged in a long-time border dispute with neighbor China.

While Tesla has found it difficult to break into India, its global rivals such as Mercedes-Benz AG have taken steps to sell locally assembled cars. They’re betting on rising demand for electric vehicles in what is the world’s most populous country and an automobile market with high growth potential.

To be sure, Tesla is still far from considering India as a base for assembling its pricey cars. Musk has said his company won’t set up manufacturing plants in any location where it isn’t allowed to first sell and service its vehicles.

But US companies including Tesla are increasingly realising the importance of pivoting beyond China as trade tensions between Washington and Beijing show no signs of easing.

Tesla could take a leaf from Apple Inc.’s playbook. The iPhone maker has carved out India as alternative manufacturing base and now produces 7% of its global smartphone output in the South Asian nation.

Check out Upcoming EV Cars in India.