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
India Today
22 minutes ago
- India Today
Trump won't allow mob rule in America, says White House amid LA unrest
US President Donald Trump 'will never allow mob rule to prevail in America,' the White House said on Wednesday, following escalating protests in Los Angeles sparked by the administration's aggressive immigration enforcement House Press Secretary Karoline Leavitt, speaking at a press briefing, said President Trump remains firmly committed to upholding law and order in the face of what she described as organized unrest. 'The most basic duty of government is to preserve law and order, and this administration embraces that sacred responsibility,' she said, as images of burning vehicles and masked demonstrators were displayed during the unrest follows a series of Immigration and Customs Enforcement (ICE) raids carried out in Los Angeles last week, a city governed by Democrats, which has long opposed Trump's immigration agenda. Though many protests were peaceful, several incidents of violence, including the torching of self-driving taxis and clashes with police, prompted a militarized gas and other non-lethal methods were deployed, and President Trump authorized the National Guard to intervene, a rare move in recent Gavin Newsom and Los Angeles Mayor Karen Bass sharply criticized the deployment, calling it excessive and politically motivated. In response, Leavitt accused both leaders of dereliction of duty. 'Governor Gavin Newsom and Mayor Karen Bass shamefully failed to meet their sworn obligations to their citizens,' she said, also alleging that Newsom had 'fanned the flames and demonized our brave ICE officers.'advertisementPresident Trump, speaking Tuesday at Fort Bragg military base, promised to 'liberate' Los Angeles, intensifying tensions with California's Democratic administration has also raised concerns about the organization behind the protests. Trump referred to some demonstrators as 'paid insurrectionists' equipped with professional anti-riot gear, a claim Leavitt said is under investigation. 'It's a good question the president is raising, and one we are looking into, about who is funding these insurrectionists,' she told news agency backlash is intensifying as the fast-growing 'No Kings' protest movement prepares for a massive, coordinated demonstration on June 14, coinciding with both a pro-Trump parade in Washington, DC, and the president's 79th birthday. Organizers estimate that nearly 3 million people could flood streets in cities across the country in what they describe as a unified stand against response, the White House remains defiant. 'President Trump will never allow mobs to take over the United States,' Press Secretary Karoline Leavitt said, signaling no intention to yield to mounting public inputs from agenciesTune InMust Watch
Hindustan Times
22 minutes ago
- Hindustan Times
Pete Hegseth confirmed Iran working towards nuclear weapon, claims US senator
US senator from Arkansas Tom Cotton on Thursday claimed that defence secretary Pete Hegseth had confirmed that Iran was working towards building a nuclear weapon amid a stalled nuclear deal between the countries. In a post on X, Tom Cotton said, 'Today @SecDef confirmed that Iran's terrorist regime is actively working towards a nuclear weapon. For the sake of our national security, the security of our allies, and millions of civilians in the region this cannot be allowed to happen.' Also Read: Israel preparing strike on Iran's nuclear facilities, suggests US intelligence: Report The US and Iran have been negotiating a nuclear deal for around two months, with Oman mediating. They have held five rounds of talks. US President Donald Trump, after being elected for his second term, had said he wants a deal that curbs Iran's atomic activities and that the US could strike Iran if the talks break down. Also Read: Trump travel ban shows 'deep hostility' towards Iranians, Muslims, says Iran Israel, which believes a nuclear-armed Iran would pose an existential threat has also threatened to attack Tehran, with or without US help. Iran has long denied having plans to build a nuclear weapon, although it has been enriching uranium to a higher point than required for civilian purposes, leading to wariness from the US and other western countries. Earlier this week, Trump said he was "much less confident of a deal being made. 'They seem to be delaying, and I think that's a shame," he told the New York Post. Also Read: A thaw in Iran-Canada ties? Tehran says 'ready for talks' to restart relations Iran has warned of retaliation against US military assets in the Middle East if the talks collapse and the Islamic Republic is attacked. 'I sincerely hope it won't come to that and that the talks reach a resolution,' Iran's Defense Minister Aziz Nasirzadeh said. 'But if they don't, and conflict is imposed on us, the other side will undoubtedly suffer greater losses. We will target all US bases in host countries without hesitation," he added.
India Today
22 minutes ago
- India Today
Elon Musk spoke to Trump before apologising over social media feud: Report
Elon Musk privately called President Donald Trump on Monday before posting a message on X saying he regretted some of his social media comments, according to a White House source cited by apology, posted on X (formerly Twitter) on Wednesday, read: "I regret some of my posts about President @realDonaldTrump last week. They went too far." Trump later called the gesture "very nice," signalling a possible thaw in their public feud. advertisementAccording to the New York Times that the apology came after Musk spoke privately with Vice President JD Vance and White House chief of staff Susie Wiles on Friday. The talks aimed to find a way to calm tensions between the two men, who had been engaged over a social media FEUD FOLLOWED BY A SOFTENING OF TONE The feud began last Thursday when Musk lashed out at Trump's Big Beautiful Bill. Trump responded by downplaying Musk's role in his political success. The argument quickly escalated after Musk even tried to link Trump to convicted sex offender Jeffrey the next few days, Musk signalled that he wanted to fix the relationship. After his conversation with Wiles and Vance, he deleted several social media posts, including one that alleged Trump's name was in government files related to Musk's efforts, Trump reportedly told his advisers he was not interested in talking to the billionaire and was "done with him." He repeated the same message in press interviews. However, behind closed doors, teams on both sides were working to bring about a MOVES TO MEND TIES Musk seemed more keep to make peace, despite the fact that both men had a lot on the line. Trump threatened to revoke SpaceX's billion-dollar government contracts. Ahead of the 2026 midterm elections, Musk, who is also one of the biggest donors to the Republican Party, has promised to contribute an additional $100 million to Trump's outside political knowledge of the inner circle of the administration also gives him a great deal of influence. Trump might not want to exclude Musk entirely in order to avoid the issues of his term in the office, where former staffers wrote books on him, revealing some 'critical' InMust Watch
