Electric vehicle manufacturer Tesla is actively pursuing components valued at approximately $1.9 billion from India this year, according to statements made by Piyush Goyal, the Minister of Commerce and Industry, on Wednesday.
Minister Goyal pointed out that the demand for electric vehicles is expected to increase, contributing to the sector\’s growth. He stated, \”Tesla had already procured around $1 billion worth of components from various suppliers here last year.\”
Furthermore, Goyal mentioned, \”I have a list of companies that supply to Tesla. Their target for this year is nearly between $1.7 billion to $1.9 billion,\” while addressing members of the Automotive Component Manufacturers Association of India (ACMA) during their annual session.
The electric vehicle (EV) market in India is on the rise, driven by escalating conventional fuel costs. With over 2.8 million EVs already in use, India\’s EV market is projected to experience substantial growth, with a Compound Annual Growth Rate (CAGR) of 94.4% by 2030. As both global and domestic automakers expand their presence in this sector, the valuation of India\’s EV market, which was valued at $3.21 billion in 2022, is anticipated to surge to $114 billion by 2029.
In response to questions about foreign firms considering investments in India as part of their \”China-plus-one\” strategy, Goyal emphasized that these companies are attracted to India for its unique strengths. He stated, \”I completely reject the \’China-plus-one\’ theory. That is not what will drive India… Today, India stands on its own merits. The India of today offers opportunities for the rest of the world in terms of both investment and trade.\”
Goyal stressed that India provides a conducive business environment, a skilled workforce, managerial expertise, a vast market, and a demand created by its population of 1.4 billion.
However, foreign direct investment (FDI) equity inflows witnessed a 34% decline to $10.9 billion in the June quarter compared to the same period the previous year, as indicated by official data. This decline was primarily attributed to a slowdown in Western economies.
Highlighting India\’s attractiveness, Goyal remarked, \”It is a rules-based economy, a young democracy, and one of the fastest-growing large economies. All these factors make it an irresistible investment destination. Consequently, companies from around the world are moving beyond the \’China-plus-one\’ narrative and viewing India as a trusted partner.\”
In certain sectors, such as taxi services and public transport buses, India is already witnessing electric vehicles becoming an increasingly compelling investment choice.