Power shift: How Tesla's turmoil is steering global capital towards India
Getty Images (Image for representation) The Musk–Trump standoff may have caused a ripple of fear in US markets, but for India, it is a signal to act.
In the high-stakes arena of global business and politics, few collisions make markets tremble like the fallout between a tech titan and a political juggernaut. This is exactly what unfolded in early June 2025 when Elon 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 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.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.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.
The contributors is Assistant Professor and Research Supervisor, St. Thomas College (Autonomous), Thrissur – Kerala.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
23 minutes ago
- Business Standard
China's rare earth ban to have short term hit; seeking alternatives: Goyal
Commerce and Industry Minister Piyush Goyal on Monday said China's restrictions on the export of rare earth elements and related magnets will have short-term impacts on the domestic automotive and white goods sectors. He further added that the government and the industry are working actively on solutions, including diplomatic engagement, to resolve the matter. Goyal is on an official visit to Switzerland to meet Swiss leaders and businesses and explore new avenues under the recently signed Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA). "Obviously, there are issues around the stopping of permanent magnets from China to India, which will affect our auto sector, particularly, and several white gods and other sectors Some companies have put in their applications, and we hope that good sense should prevail and they will get their approvals for permanent magnets," he told reporters. A wake-up call: Goyal Goyal further added that the companies are also looking at Indian Rare Earths Limited (IREL) by providing the necessary materials to be able to develop, speed up the development of domestic products. "In a way, it's a wake-up call for all those who have become over-reliant on certain geographies. It's a wake up call for the whole world that you need trusted partners in your supply chain," Goyal said. When questioned about the possibility of introducing a production-linked incentive (PLI) scheme for the sector, the minister said that he has engaged with the automobile companies, who remain "very" confident about resolving the issue. "They are in dialogue with our innovators, startups and they say they will take care of any funding requirement or pricing correction that may need to encourage faster roll out and growth of this sector," Goyal said. What's the rare earth magnet issue? In response to increased tariffs from the United States under President Donald Trump, China introduced new export controls on seven key rare earth elements and associated magnets starting April 4. The elements affected—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—are essential in sectors such as defence, energy, and automotive technology. Under the new rules, Chinese firms must now obtain special defence-related licences before they can export these materials. China is home to about half of the world's rare earth reserves and is responsible for 70 per cent of global extraction and more than 90 per cent of processing. While the United States, Brazil, and Australia also have significant reserves, India's share stands at around 7 to 8 per cent. However, Australia, Brazil, and the US produce very little in terms of rare earth magnets. Hong Kong contributes 10 to 15 per cent of rare earth ore extraction, whereas Japan and South Korea account for 2 to 4 per cent. Vietnam and Malaysia handle 7 to 8 per cent of processing, with the majority of processing activities still concentrated in China. According to media reports, global automakers have expressed concerns over potential supply-chain disruptions caused by the export ban of rare earth magnets. In Japan, Suzuki Motor had to halt production of its Swift model due to the shortage. Meanwhile, India's auto industry group SIAM has reportedly warned the government of a complete production halt as early as late May or early June. (With inputs from PTI.)
News18
25 minutes ago
- News18
Trump Breaks Silence On Allegations Of Elon Musk Drug Using Drugs In White House: 'I Hope Not'
Last Updated: Trump expressed uncertainty but hoped Musk wasn't using illicit substances while handling DOGE. US President Donald Trump has broken his silence on claims of his one-time First Friend, Elon Musk, using drugs while leading the administration's initiative to slash government spending as Department of Government Efficiency (DOGE) chief. The Republican said he's not sure if the tech billionaire was using illicit substances in the White House, but 'hopes" he never did. 'I really don't know. I don't think so. I hope not," The president told reporters on Monday when asked about the reports saying Musk used so much ketamine, a powerful anaesthetic, that he developed bladder problems. Trump further stressed he had a 'good relationship" with the business tycoon who donated about $275 million to help him win the presidency, and wished him well. 'I just wish him well. Very well, actually," the 78-year-old leader said. Despite their public fallout last week, this is the most Trump has said about 53-year-old Musk's alleged use of medical as well as recreational drugs. According to a New York Times report, the business tycoon used ketamine, ecstasy and psychedelic mushrooms while campaigning with Trump in 2024. Quoting people familiar with the matter, the report said Musk was using drugs far more intensely than previously known during the past year as he became Trump's closest ally. He was reportedly travelling with a daily medication box that held about 20 pills, including ones with the markings of the stimulant Adderall. The SpaceX CEO earlier admitted to taking ketamine. He said he was prescribed the drug to treat a 'negative frame of mind" and he also said that he benefited in his work by taking these drugs. First Published: June 10, 2025, 16:47 IST
Time of India
31 minutes ago
- Time of India
US Stock markets today: Wall Street futures inched up before opening bell, US-China trade talks enter 2nd day
Investors are watching China-US trade talks in London that could have a huge impact on the global economy as early trading on Wall Street was mostly flat. Futures for the S&P 500 and the Nasdaq each inched up 0.1% before the bell Tuesday, while futures for the Dow Jones Industrial Average were essentially flat. A second day of talks was planned after US and Chinese officials met in London on Monday for negotiations over various issues, AP reported. The hope is that they can eventually reach a deal to reduce painfully high tariffs. Most of the tariff hikes imposed since US President Donald Trump escalated his trade war are paused to allow trade in everything from tiny tech gadgets to enormous machinery to continue. The S&P 500 has rallied after dropping roughly 20% from its record two months ago when Trump shocked financial markets with wide-ranging tariff threats during what he called 'Liberation Day.' Still, confusion over the potential ramifications of Trump's sweeping tariff threats have caused a host of companies to lower or altogether pull their financial guidance. That trend continued Tuesday with Designer Brands, the owner of DSW retail shoe outlets. CEO Doug Howe blamed the company's slow start to the year on an 'unpredictable macro environment and deteriorating consumer sentiment.' Designer Brands shares fell nearly 7.5% before the bell Tuesday after the company — which also owns the Keds and Hush Puppies brands — posted a much wider loss than analysts were expecting. Tesla rose early Tuesday, a day after it recovered a decent chunk of its sharp, recent drop. The electric vehicle company tumbled last week as Elon Musk's relationship with Trump imploded, but shares were up 2.3% in premarket after climbing 4.6% Monday. McDonalds dipped 1.4% after its stock was downgraded by Morgan Stanley, which cited 'structural pressures' on the fast food sector, most notably cash-strapped lower income consumers. In Europe at midday, Germany's DAX lost 0.3%, Britain's FTSE 100 gained 0.5% and the CAC 40 in Paris was unchanged. In Asian trading, Tokyo's Nikkei 225 gained 0.3% to 38,211.51, yielding most of its earlier gains, while the Kospi in South Korea rose 0.6% to 2,871.85. Hong Kong's Hang Seng reversed an early advance, slipping 0.1% to 24,162.87. The Shanghai Composite index dropped 0.4% to 3,384.82. There was no fresh news on the US-China trade talks, but investors appeared to grow more nervous as the day wore on. 'Chinese stocks did what they often do when geopolitics starts tightening the noose — they flinched. What began as a calm morning session flipped into a jittery sell-off as traders returned from lunch with a different mood," Stephen Innes of SPI Asset Management said in a commentary. In Taiwan, the Taiex surged 2.1%. Australia's S&P/ASX 200 advanced 0.8% to 8,587.20. India's Sensex was nearly unchanged. US benchmark crude oil picked up 37 cents to $65.66 per barrel. Brent crude, the international standard, was up 36 cents at $67.40. The dollar fell to 144.53 Japanese yen from 144.61 yen. The euro ticked up to $1.1430 from $1.1421. In the bond market, the yield on the 10-year Treasury eased to 4.45% from 4.48% late Monday. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
