JSW group keen to launch car in EV segment at Rs 15-20 lakh price tag

The promoter entities of JSW Group are in talks with several electric-car manufacturers in China to launch an electric car for the Indian market at Rs 15-20 lakh, a source close to the development said.

At the same time, the group, led by Sajjan Jindal, is in discussion to acquire a sizeable stake in MG Motor India, makers of MG ZS EV, costing around Rs 23.28 lakh, and a small electric car called Comet, priced at Rs 9.98 lakh upwards.

The Chinese promoter of MG Motor will hold a minority stake if the talks succeed, said the source.

The valuation of MG Motor under discussion is $1.2-1.5 billion.

MG Motor acquisition is the group’s Plan A to enter the electric-vehicle (EV) segment, though the acquisition would come with legacy ICE (internal combustion engines) cars too.

“The group has also worked out Plan B in case the talks with MG Motor fail.

"It is just waiting for the MG Motor discussion to close either way.

"The Halol facility of MG Motor has the capacity to make about 150,000 vehicles per annum, and the company needs another site to expand in the future; hence the group is in talks to acquire Ford’s facility in Chennai,” said the source.

A JSW group spokesperson declined to comment.

Jindal had first planned to enter the EV segment via his listed entity JSW Energy in 2017, but the plan was shelved within two years after some shareholders objected to it.

The source said in the past five years, no Indian player had moved in a big way in the EV segment despite rising demand from millennials.

“The group thinks none of the big companies in the industry is making big enough moves, and some EVs are just a retrofit of their ICE cars,” the source said.

Electric car sales in India touched 18,917 in the June quarter, with Tata Motors leading the pack with 10,846, followed by MG Motor at 1,902.

The Indian automobile market is at four million passenger vehicles per annum as of date. It will double by 2030.

“The group believes that at least 30 per cent of the eight million vehicles will be EV or hydrogen, or alternative fuels by 2030.

"Hence the group felt it was a big opportunity and started looking at getting technology partners. In order to hit the Rs 15-20 lakh priced car with profitability and scale, China was the right model,” the source said.

The delay in MG Motor discussions led the company to engage in negotiations to acquire Ford India’s manufacturing facility, about 45 kilometres from Chennai.

According to a source, companies such as Ola Electric, Hyundai Motor India, Tata Motors, and MG Motor had engaged in multiple rounds of discussion with Ford India’s management over the past two years regarding acquisition.

In September 2021, the American multinational had announced its plans to pull out of India and stop vehicle manufacturing in the country.

“Negotiations are taking place with JSW Group,” said a source aware of the development.

“We continue to explore alternatives for the Chennai plant,” said a Ford India official, without divulging details.

The Chennai unit of Ford, spread across an area of 350 acres, had an annual production capacity of around 200,000 vehicles and 340,000 engines.

The state authorities were also silent on the development.

For any investor, Maramalai Nagar is considered lucrative because it is hardly 50 km from Chennai port and 74 km from Ennore port.

In addition to its proximity to Chennai, the plant is easily accessible to Bengaluru, which is only 320 km away by road.