As of April 2025, Tesla was reported to be talking to three Indian semiconductor ventures, Tata Electronics, Micron's assembly and test plant in Gujarat and CG Semi, about sourcing chips for its global operations. The aim is to reduce its dependence on China and Taiwan for mature-node chips used in battery management, vehicle control and infotainment. For India, a customer of Tesla's scale would be a strong signal that its new fabs and assembly plants can serve the global automotive market. None of the companies had confirmed the details publicly at the time of writing.
As global electric vehicle (EV) leader Tesla works to secure its semiconductor supply chain, India has become part of the plan. Reports in April 2025 pointed to deeper collaboration with Indian semiconductor players, a shift in global supply dynamics. Here is a breakdown of how Tesla is reported to be building ties in India, and what it means for EVs and for India's semiconductor ambitions.
Key takeaways
- Tesla was reported in April 2025 to be in talks with Tata Electronics, Micron and CG Semi on chip sourcing and packaging capability.
- The chips in question are mainly mature-node parts (roughly 28 nm to 65 nm and older) used in battery management, power and body control, not leading-edge processors.
- India's projects are backed by the India Semiconductor Mission's incentive scheme of about ₹76,000 crore (roughly $10 billion).
- India's main gaps are advanced fabrication, scale and an established supplier base; its strengths are cost, engineering talent and policy support.
- This is a dated news analysis: it reflects reports up to April 2025.
Why India? Geopolitics and a growing ecosystem
Two factors drive Tesla's interest in India: geopolitical tension and the need to diversify its supply chain. The original reports said that over 80% of Tesla's mature-node chips (28 nm to 65 nm) come from China and Taiwan; that share has not been confirmed by Tesla. Either way, rising US-China trade tension and tariffs, together with rising production costs, make concentrated sourcing a risk. India is emerging as a semiconductor location, supported by government incentives such as the India Semiconductor Mission, and offers a skilled workforce, cost competitiveness and growing infrastructure, which fit Tesla's goal of a resilient, multi-regional supply chain.
Key partnerships behind Tesla's India strategy
| Partner | Facility and investment | Role for Tesla (as reported) | Status in April 2025 |
|---|---|---|---|
| Tata Electronics | Fab at Dholera, Gujarat (₹91,000 crore, with PSMC of Taiwan); assembly and test plant at Jagiroad, Assam (₹27,000 crore) | Legacy-node chips for global operations | Both projects approved by the Indian cabinet in February 2024; under construction |
| Micron Technology | Assembly and test plant at Sanand, Gujarat (about $2.75 billion total, including government support) | Automotive-grade memory | Reported talks |
| CG Semi | Assembly and test plant at Sanand, Gujarat (₹7,600 crore), with Renesas and Stars Microelectronics | Packaging and test services | Reported talks |
Tata Electronics: building a foundation
Reports in April 2024, citing The Economic Times, said Tesla had signed a strategic deal with Tata Electronics some months earlier, in 2023, to procure chips for its global operations. Neither company commented on the terms. Tata is investing ₹91,000 crore in a semiconductor fab in Gujarat and ₹27,000 crore in an outsourced semiconductor assembly and test (OSAT) facility in Assam. These facilities are expected to make and package the kind of chips used in Tesla's battery management systems (BMS) and vehicle control units, helping to stabilise supply during shortages.
Micron Technology: automotive-grade memory
Tesla was reported to be in advanced talks with US-based Micron, which is building an assembly and test facility in Gujarat, with a total project value of about $2.7 billion to $2.75 billion including central and state government support. The plant will assemble and test memory, including DRAM, which is essential for autonomous driving and infotainment systems. Localising production could cut lead times and costs while meeting growing EV demand in Asia. Note that this is an assembly and test plant: the memory wafers themselves are made in Micron's fabs elsewhere.
CG Semi: scaling OSAT capacity
CG Semi, a subsidiary of Mumbai-headquartered CG Power and Industrial Solutions, part of the Chennai-based Murugappa Group, was also reported to be in talks with Tesla about OSAT services. Its ₹7,600 crore Sanand facility, developed with Renesas and Stars Microelectronics, will package and test chips. A Tesla link would show that India can deliver scalable, cost-effective solutions for high-volume EV components.
India's semiconductor rise: opportunities and challenges
Tesla's interest could speed up India's semiconductor industry and help position it as a global supplier. Analysts note that India's focus on legacy-node chips, reported to account for around 70% of the semiconductor content in automotive components (a figure that varies by source), fits Tesla's needs for BMS, safety controls and infotainment.
Why mature nodes matter for cars
Most chips in a car are not leading-edge processors. Power management ICs, microcontrollers, sensors, motor drivers and analog front ends are built on mature nodes because those processes are proven, cheaper, tolerant of high temperature and voltage, and available for the long product lifetimes car makers require. The 2021-2022 chip shortage hit exactly these parts, which is why car makers now want more than one region supplying them.
The challenges
- India does not yet have the advanced fabrication capability of Taiwan or South Korea; its first commercial fab targets mature nodes.
- Current investments, while significant, are small next to China's. The original post cited a $150 billion Chinese semiconductor fund; that figure is commonly used for China's overall national chip investment plan, while the third phase of its national "Big Fund", launched in May 2024, was reported at about 344 billion yuan (roughly $47.5 billion).
- Competing with subsidised production costs in China and Taiwan will need sustained policy support.
- Automotive qualification (AEC-Q100 and car-maker audits) takes time, so new plants need several years to become qualified suppliers.
The road ahead: Musk's India visit and manufacturing ambitions
Elon Musk had said on X (formerly Twitter) that he planned to visit India. A planned trip in April 2024 was postponed, and in April 2025 he again said he looked forward to visiting later in the year, so a visit was still expected at the time of writing. Industry observers speculated that Tesla might announce local EV manufacturing, using India's EV policy announced in March 2024, which offers lower import duties to car makers that commit to investing in domestic production. Tesla's immediate focus in these reports was semiconductors, but longer-term goals could include a factory or R&D centre, in line with India's aim to become an EV export hub.
A win-win collaboration
If the reported partnerships go ahead, they mark an important moment for both sides. For Tesla, they are a hedge against geopolitical risk and a step towards cost-efficient, localised supply. For India, they are a chance to accelerate its semiconductor ambitions, create jobs and attract further global investment. As one automotive analyst, Ashwin Amberkar, was quoted in reports at the time: "Partnering with a global EV leader could be catalytic for India's chip ambitions."
The journey will not be without hurdles, but with Tesla's scale and India's determination, this alliance could reshape automotive electronics supply, one chip at a time.
FAQ
Has Tesla confirmed chip deals with Indian companies?
As of April 2025, the deals and talks were reported by Indian business press, mainly The Economic Times, and not confirmed publicly by Tesla or its partners.
What kind of chips would India supply to Tesla?
Mainly mature-node chips and packaging and test services: parts for battery management, power control, body electronics and memory modules, rather than the advanced processors used for self-driving computers.
When will India's fabs be ready?
The Tata fab and the assembly plants were under construction in April 2025, with assembly and test plants expected to start output first. Automotive qualification would follow, so volume supply to car makers is a multi-year process.
Your comments will be moderated before it appears here.