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.'
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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