Indian auto parts makers' shares gain on report of talks with Tesla

Bengaluru

SHARES of Indian auto parts suppliers rose as much as 14 per cent on Monday following a report electric-vehicle (EV) maker Tesla was in talks with at least three companies to source critical parts for its planned entry into the country.

Tesla, which is looking to set up a factory in India if it is successful with imported vehicles, is holding early talks with some companies for the supply of components such as instrument panels, windshields, differential gears, brakes and power seats, The Economic Times reported on Sunday.

Bharat Forge, Sona BLW Precision Forgings and Sandhar Technologies are understood to be among the Indian companies already supplying components to Tesla, said the report. Shares of the three Indian firms rose as much as 6.2 per cent to 13.7 per cent on Monday.

India's auto component makers want Tesla's potential entry to benefit the country's suppliers, and one way to achieve that is for the company to manufacture locally, the head of an industry body said earlier in August.

Reuters previously reported India was considering slashing import duties on electric cars to as low as 40 per cent.

The country is the world's fifth-largest car market with annual sales of three million vehicles, industry estimates showed, with EVs making up a fraction of the total. However, EV sales have been gradually rising in the country as states improve charging infrastructure.

Elon Musk, the chief executive of Tesla, the world's most valuable automaker by market capitalisation, has tweeted several times about the company's impending foray into India.

Tesla registered a local company in January and by April has started scouting for locations to open showrooms in New Delhi, Mumbai and Bengaluru. REUTERS