Power shift: How Tesla's turmoil is steering global capital towards India
Musk
, the CEO of
Tesla
and SpaceX, clashed publicly with former U.S. President Donald
Trump
. The result? This was a devastating blow to Tesla's stock, which plunged by over 14% in a single day, wiping out an estimated $150 billion in market capitalisation. This was not just a stock market blip; it was the most severe single-day loss for Tesla since its listing and one of the most dramatic wealth erasures in corporate history.
The catalyst? Trump's verbal attacks on Musk during a campaign rally, accusing him of being "disloyal" and threatening to cut off federal contracts and regulatory support for Tesla and SpaceX if he regains the presidency, were also included. Investors responded with a swift selloff, and Tesla's valuation fell below the trillion-dollar mark. Global markets watched in shock as this political-personal feud spilled over into financial chaos.
However, amid this volatility lies a powerful truth: in global disruption, emerging markets like India often find their greatest opportunities. As the U.S. grapples with political instability and tech industry turbulence, India stands poised to benefit from capital reallocation, tech realignment, and supply chain diversification. While damaging to U.S. markets, the Tesla shockwave could become a springboard for India's clean-tech and high-growth sectors.
India's EV Ecosystem: Charging Ahead as Tesla Slows Down
India has been on an accelerated path toward electrification, and Tesla's current struggles have only sharpened the global spotlight on India's domestic electric vehicle (EV) ecosystem. As Tesla faces regulatory headwinds and reduced investor confidence, India's homegrown EV sector is booming, powered by market demand and policy incentives.
In the fiscal year 2024–25, India's EV market crossed a new milestone with over 1.7 million
electric vehicles
sold, reflecting a 96% year-on-year increase. Leading the charge are Indian companies such as Tata Motors, Mahindra Electric, and Ola Electric, which have committed billions of rupees to expand their EV product lines, charging infrastructure, and battery assembly capabilities.
The Indian government's Faster Adoption and Manufacturing of Hybrid and Electric Vehicles(FAME-II) scheme and the Production-Linked Incentive (PLI) Scheme for Advanced Chemistry Cell Battery Storage worth ₹18,100 crore have further catalysed industry momentum. States such as Tamil Nadu, Gujarat, and Maharashtra have introduced EV-specific policies offering land, tax exemptions, and power subsidies to manufacturers. As global investors rethink high-risk bets in politically volatile environments such as the U.S., they are increasingly drawn to India's policy stability, market scale, and rising consumer demand.
Analysts at Morgan Stanley and Goldman Sachs recently highlighted India's EV sector as a 'structural investment theme' for the next decade. Tesla's hiccups may prompt global auto majors to partner with or invest in Indian EV startups as a hedge against Western uncertainty, creating an entirely new lane for India's industrial growth.
Supply Chain and Clean-Tech Investment: India as the Next Global Pivot
Tesla's valuation collapse was not just a corporate crisis; it exposed the deeper fragility of global supply chains tethered to geopolitical risks. Tesla's core supply lines depend heavily on rare earth elements (REEs), lithium, and semiconductors, many of which are sourced from China, South America, or politically sensitive regions.
With U.S.–China tensions rising and Trump threatening tighter trade policies, the world's clean energy future needs new anchors—and India is stepping into that vacuum. In response to the rising global demand and strategic concerns, India unveiled its Critical Minerals Strategy (2023), identifying 30 minerals, including lithium, cobalt, and nickel, as essential for national security and industrial development.
The Geological Survey of India discovered a significant 5.9-million-ton lithium reserve in Jammu and Kashmir—India's first—and auction processes are already underway for its commercial extraction. Meanwhile, India's semiconductor manufacturing mission—backed by a ₹76,000 crore incentive package—has begun bearing fruit. Micron Technology, in collaboration with Tata Group, is establishing chip assembly and testing units in Gujarat. These developments are being closely monitored by global players looking to diversify away from China and the U.S. India's proven IT prowess, skilled workforce, and competitive cost structures provide it with a unique advantage in scaling both battery and semiconductor supply chains.
According to BloombergNEF, global clean energy investments are expected to cross $2 trillion in 2025, and India is projected to attract nearly $60 billion, up from $45 billion in 2024. The Tesla–Trump debacle added urgency to this diversification. Indian companies working in battery storage, solar inverters, EV components, and green hydrogen can now tap into redirected global capital that would have otherwise flown into American companies.
Moreover, India's space technology sector, often overlooked, is quietly booming. As Trump's remarks also targeted SpaceX and its satellite network Starlink, Indian startups like Skyroot Aerospace, Agnikul Cosmos, and Pixxel are seizing the moment to attract international investments. With 30 private satellite launches scheduled for 2025 and a supportive government ecosystem, India's space economy could grow to $13 billion by 2026, up from $7 billion in 2022, according to the EY-ISpA.
Disruption for Some, Direction for Others
The Musk–Trump standoff may have caused a ripple of fear in U.S. markets, but for India, it is a signal to act. As Western investors reassess the risks of politicised corporate battles, India offers a pragmatic alternative rooted in stable policy, scalable infrastructure, and strategic clarity. The Tesla fallout, while costly for America's most iconic EV brand, might accelerate India's emergence as a global industrial and investment powerhouse. In the wreckage of a $150 billion loss lies the blueprint for India's trillion-dollar leap.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
35 minutes ago
- Time of India
'Reserve the right to suspend...': Amidst trade deal talks, India proposes retaliatory duties against US at WTO; here's what the issue is about
India has informed the WTO's Council for Trade in Goods regarding its intended suspension of concessions. (AI image) India has proposed retaliatory tariffs on Friday against the United States at the WTO (World Trade Organisation) in response to American safeguard measures on the automobile sector. The move comes amidst ongoing trade deal talks with the Donald Trump administration. "The proposed suspension of concessions or other obligations would take the form of an increase in tariffs on selected products originating in the United States," states a WTO notification circulated at India's request. According to a PTI report, India has informed the WTO's Council for Trade in Goods regarding its intended suspension of concessions and other obligations under specific WTO provisions. India-US WTO Issues On March 26 this year, the United States implemented a safeguard measure, imposing a 25 per cent ad valorem tariff increase on imports of passenger vehicles, light trucks, and specific automobile parts from India. Starting from May 3, 2025, these regulations were implemented for automobile components and will continue indefinitely. Also Read | India-US trade deal: What's the deadlock about? Top issues blocking agreement as Donald Trump's 26% tariff deadline looms "This notification is made in connection with safeguard measures extended by the United States of America on imports of automobile parts from India," the WTO document indicated. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo The United States has not registered these regulations with the WTO, although they fundamentally constitute safeguard measures. India's position maintains that the United States' actions do not align with GATT (General Agreement on Trade and Tariff) 1994 and the Safeguards Agreement. Since the United States has not responded to India's request for consultations regarding these tariffs, India has stated it "reserves the right to suspend concessions or other obligations". The safeguard measures would impact annual imports worth $2,895 million into the United States from India, resulting in duty collections of $723.75 million. "Accordingly, India's proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the United States," according to the statement. In March, India implemented comparable measures in response to American tariffs on steel and aluminium. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
&w=3840&q=100)
Business Standard
36 minutes ago
- Business Standard
Time to retire the ISS? Musk pushes for Mars as next big space destination
Elon Musk has once again stirred the space debate with call to retire the International Space Station (ISS). The SpaceX CEO shared a post on X detailing the space-related funding from US President Donald Trump's latest tax bill, which includes $1.25 billion for the ISS. Musk said, 'It's time to retire the Space Station and focus on Mars.' ELON MUSK 'It's time to retire the Space Station and focus on Mars.' — Tesla Owners Silicon Valley (@teslaownersSV) July 3, 2025 The same bill also sets aside $325 million for the safe deorbiting of the ISS by 2030 — an acknowledgement that the end of its mission may be near. Why Musk believes the ISS has outlived its purpose Musk has long been vocal about his view that the ISS no longer offers sufficient return on investment. According to him, its aging infrastructure — many parts of which are over 20 years old — poses a growing maintenance challenge and limits its scientific output. He argues that continued funding for the station pulls resources away from bigger priorities, namely, sending humans to Mars. For Musk, Mars is not just the next frontier but a crucial lifeboat for humanity's future. In his vision, planetary colonisation is essential, and all efforts — including financial ones — should now be directed toward that goal. A viral glimpse of the red planet Elon Musk's Mars ambitions are not just limited to statements. In February this year, he reignited public interest by sharing an AI-generated video on X, showcasing a futuristic city on Mars. The one-minute, 12-second clip, captioned 'Welcome to Mars', featured an advanced Martian settlement and quickly went viral. Welcome to Mars — Elon Musk (@elonmusk) February 11, 2025 A long-standing obsession with Mars Musk has never hidden his ambitions for a multi-planetary future. At the 2016 Recode Code Conference, he said, 'If things go according to plan, we should be able to launch people probably in 2024 with arrival in 2025,' referring to his plans to send humans to Mars. Aging infrastructure and deorbit plans In July 2024, Nasa had confirmed that the International Space Station (ISS) cannot remain in orbit indefinitely due to the effects of Earth's atmosphere, which causes gradual orbital decay even at its altitude of about 415 km (257 miles). Without regular reboosts, the ISS would naturally re-enter the atmosphere within one to two years, making a controlled deorbit essential to avoid the risk of debris falling on populated areas. The US space agency has evaluated various options for the station's end-of-life, including disassembly, boosting to a higher orbit, or transferring to commercial operators, but concluded that a controlled deorbit using a dedicated vehicle is the safest and only viable method. In 2024, Nasa selected SpaceX to develop this deorbit vehicle, which will guide the station to a remote part of the ocean at the end of its mission in 2030, minimising risks to people and property on Earth.
&w=3840&q=100)
Business Standard
37 minutes ago
- Business Standard
India's liquidity surplus unlikely to lift credit growth, says JP Morgan
Bank lending to the Indian economy may not see a meaningful boost despite the large liquidity surplus in the banking system, economists at J.P. Morgan said in a report on Friday. While surplus liquidity influences overnight borrowing costs, a recent analysis by the firm showed it does not impact credit or deposit growth in the economy. The Indian central bank has cut rates steeply and flooded the banking system with liquidity since December as it sought to counter signs of a slowdown in the Indian economy amid modest inflation. The Reserve Bank of India has said it hopes the combination of rate cuts and easy liquidity would help transmit lower interest rates across the economy and prompt individuals and firms to borrow more. Bank credit growth slipped to below 10 per cent in May. "We find that the role of liquidity in boosting monetary policy transmission occurs primarily through influencing overnight market rates, within the policy corridor," J.P. Morgan economists Toshi Jain, Sajjid Z Chinoy and Divyanit Sood said in the study dated July 4. "There is no evidence of a 'credit channel' on deposit and lending growth beyond this." The economists added that the findings suggest the central bank should inject or withdraw only as much liquidity as needed to keep overnight rates aligned with the policy repo rate, adding that excess liquidity operations have no independent effect on credit growth. A large surplus of liquidity in the Indian market pushed overnight rates down to below the policy repo rate in recent months and, in some cases, even below the floor of the interest rate corridor. The RBI withdrew 1 trillion rupees ($11.7 billion) from the banking system on Friday through a seven-day variable rate reverse repo, rolling over an operation from last week, to ensure rates don't fall too low. India's policy repo rate, the mid-point of the corridor, stands at 5.50 per cent, while the standing deposit facility (SDF) rate, the floor of the corridor, is at 5.25 per cent. "Pushing up the overnight rate will constitute a tightening of monetary policy at a delicate time. Yet, eventually, the sanctity of the operating target will need to be adhered to," J.P. Morgan economists said.
