Auto component industry wants Tesla to manufacture EVs locally in India

India's auto component industry is eager to host US-based electric car manufacturer Tesla to build EVs locally in India. Automotive Component Manufacturers Association (ACMA), the industry body in the country wants Tesla's entry in India to benefit local suppliers of auto parts.

Deepak Jain, President of ACMA, said, "We will always promote localisation. We would welcome any foreign or domestic entry, capacity expansions on any vehicle segment as long as it promotes value addition and localisation, which gives the opportunity for the component sector to flourish."

ACMA said it is coordinating with the Centre to try to figure out EV parts that can be manufactured locally.

Incidentally, Elon Musk recently said that Tesla factory in India is quite likely but at the condition that its imported cars first succeed in the country. However, Musk remains sceptical about importing its electric cars to India with high import duties.

ACMA has echoed views shared by Bhavish Aggarwal, CEO of Ola Electric, who backed local manufacturing of electric cars besides reduction in costly import duties. However, some of the other carmakers feel import duty cut is essential to make electric cars succeed in India. Mercedes-Benz also backed local manufacturing of EVs, but said tax cut is important for the carmaker to first test the waters. Santosh Iyer, vice president, sales and marketing at Mercedes in India, was quoted by news agency Reuters, saying, "To give confidence to carmakers, if India is able to liberalise the import tax then companies like Mercedes can test the market and choose to manufacture EV models locally."

One of the concerns for EV makers in India is the supply of lithium, the most critical component to build batteries for electric vehicles. India will have to depend mostly on China for the import of lithium to produce batteries locally.