Following reports in the local media about the United States based electric car maker Tesla holding talks with at least three auto parts suppliers of India to decide on sourcing critical parts for its cars for an anticipated entry of the company into India, stocks of auto parts suppliers in the country surged by as much as 14 per cent on Monday.
According to previous reports, Tesla plans to set up a factory in India if its finds uptake for its cars that it will initially import. According to a report published in the Economic Times on Sunday, the global leader in the electric car market is already engaged in early negotiations with some companies for supply of critical components for its cars such as for instrument panels, windshields, differential gears, brakes and power seats.
It has been reported that a number of Indian auto part makers, including Bharat Forge Ltd, Sona BLW Precision Forgings Ltd and Sandhar Technologies Ltd, are already supplying car components to Tesla.
The report pushed the stocks of the three companies as much as 6.2 per cent to 13.7 per cent on Monday.
There were however no official comments on the issue from Tesla, Bharat Forge, Sona BLW and Sandhar.
According to the comments made by the head of an industry body in August, auto component makers in India was the possible entry of Tesla into the market be beneficial for the suppliers of the country and one of the ways that can be achieved is for Tesla to start manufacturing locally.
There were previous reports about the Indian government considering reducing import duties for electric cars to as low as 40 per cent.
According to industry estimates, India is the fifth largest car market of the world and has annual sales of about 3 million vehicles but electric cars comprise only a very small fraction of the annual total car sales.
However, with charging infrastructure improving in various regions of the country, here has been a slight uptick in sales of electric vehicles.
The impending entry of Tesla into the Indian market has been tweeted on several; occasions by Elon Mush, CEO of Tesla which is currently the most valuable auto company of the world in terms of market capitalization.
Having incorporated a locally registered company in India in January this year, Tesla had started to look for locations to open showrooms in New Delhi, Mumbai and Bengaluru by April this year.
(Adapted from MoneyControl.com)