In a significant move amid the global electric vehicle (EV) boom, Tesla, the innovative electric car manufacturer, plans to spend about $1.9 billion this year sourcing components from India. Piyush Goyal, India's Minister of Commerce and Industry, made the announcement, emphasizing the escalating demand for EVs and the sector's resulting growth.
Tesla's engagement with India's component manufacturers has been steadily growing. In the previous year, Tesla procured components worth $1 billion from Indian suppliers. However, the company is now setting its sights even higher, with a target ranging from $1.7 billion to $1.9 billion for the current year.
The Indian EV market is experiencing a remarkable upsurge, largely attributed to the continuously rising fuel costs. With over 2.8 million EVs already on Indian roads, the sector is projected to achieve a staggering 94.4% Compound Annual Growth Rate (CAGR) by 2030. The market valuation, which stood at $3.21 billion in 2022, is expected to soar to an impressive $114 billion by 2029.
Foreign companies are increasingly considering India as part of their investment strategies, often referred to as the "China-plus-one" approach. Minister Goyal, however, firmly rejected this theory, asserting that India stands firmly on its own merits. He emphasized the nation's credentials, including a rules-based economy, a vibrant democracy, robust economic growth, and a vast consumer market of 1.4 billion people.
In particular, industries like taxis and public transport buses are already making a compelling case for investing in electric vehicles. With the Indian government's commitment to promoting sustainable and green transportation, the EV sector is poised for significant growth.
In conclusion, Tesla's substantial investment in sourcing components from India underscores the country's growing importance in the global EV landscape. As the EV boom continues and demand for electric vehicles surges, India is cementing its position as a crucial player in the electric vehicle supply chain.
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