Tesla's India Play Deepens As Elon Musk's EV Giant Explores Alternate Semiconductor Supply Chains Amid US-China Trade War
Tesla is exploring India as a semiconductor chip supplier amid U.S.-China trade tensions, engaging in talks with Micron, CG Semi, and Tata Electronics. This move aligns with Tesla's plans to enter the Indian automotive market, following previous unsuccessful attempts due to high tariffs and local manufacturing requirements. The Indian government has since reduced import tariffs significantly. Elon Musk has expressed interest in India and plans to visit later this year. Tesla has also delayed the launch of a more affordable Model Y version.
Tesla Inc. TSLA is eyeing India as a possible semiconductor chip supplier as the company looks at alternate supply chains in the midst of growing U.S.-China trade tensions.
What Happened: According to a report published by Economic Times on Monday, the U.S. EV giant is in talks with Micron Technologies Inc. MU as well as India's CG Semi. Tesla had last year signed a deal with India's Tata Electronics.
"Tesla spoke to representatives from the three large semiconductor facilities that have taken off in India — Micron, CG Semi, and Tata Electronics," a source cited in the report told the publication.
The report also states that Tesla had called for meetings with the companies to gauge the chips and discuss scale, as well as operational timelines.
Why It Matters: The news comes in as Tesla looks to expand into the Indian automotive market. Recently, a Tesla Model Y was spotted testing on the outskirts of Mumbai.
Tesla had tried to enter the Indian market on two previous occasions. However, it was unsuccessful due to India's high tariffs on luxury EVs and the government's insistence that Tesla manufacture vehicles locally. The Indian government has since slashed the import tariffs from 110% to 15%.
Elon Musk has shown interest in India for some time, with the billionaire having met Indian Prime Minister Narendra Modi earlier this year in Washington, D.C. Modi recently shared a post on X where he said the two discussed ‘various issues.'
— Elon Musk (@elonmusk) April 19, 2025It was an honor to speak with PM Modi.
I am looking forward to visiting India later this year! https://t.co/TYUp6w5Gys
Musk also took to X and shared how he was looking forward to visiting the country later this year.
Amid this, Tesla has delayed the launch of a more affordable Model Y version. The vehicle was initially set for an official launch in the first half of the year.
Price Action: TSLA currently trades for $241.37 on the NASDAQ, according to Benzinga Pro data.
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