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JSW Group is in talks with China’s Zhejiang Geely Holding Group Co. for a partnership to make electric vehicles (EVs).
The proposed equal joint venture with a planned investment of around $1 billion will look at manufacturing premium electric vehicles, batteries and also setting up charging infrastructure, said three people aware of the Indian conglomerate’s plans who spoke on condition of anonymity.
Billionaire Sajjan Jindal’s JSW Energy announced on 11 August that it would invest up to Rs4,000 crore to manufacture EVs and said it was in talks with several technology providers. Spokespersons for Zhejiang Geely Holding Group and JSW Group did not respond to emails seeking comment.
The Hangzhou-headquartered Zhejiang Geely Holding Group owns Geely Automobile Holdings Ltd, Volvo Car Group and the London Taxi Company. China overtook the US last year as the world’s biggest electric car market. “They (JSW) have been talking to Geely for some time,” said one of the three people.
“The plan involves premium EVs and also tapping the Geely ecosystem for battery packs and end-to-end solutions such as charging infrastructure,” said a second person. JSW’s decision to enter the space comes against the backdrop of ambitious government plans for a mass-scale shift to electric vehicles by 2030.
The third person said that the JSW Group has been looking to diversify into automobiles for some time, given its presence in the steel and energy sectors. “While it was a logical extension, JSW wasn’t keen on partnering with a traditional auto company. After the announcement of the electric mobility mission, it knew EVs would the next big thing.”
Experts say that the regulatory push and a relatively low entry barrier for EVs provide an opportunity for non-automobile firms. “As compared to traditional vehicles with internal combustion engines, EVs provide an opportunity for non-auto companies to enter the automobile market,” said Rakesh Batra, partner and national leader, auto sector, at consulting firm EY.
“Sourcing technology will be a challenge for new entrants; therefore, one will see a spate of collaborations and joint ventures in the next six to twelve months,” added Batra. Currently, Mahindra & Mahindra Ltd is the only automaker that sells a fully electric car, while companies including Maruti Suzuki India Ltd and Toyota Motor Corp. offer hybrid versions.
Interestingly, Volvo’s July announcement of phasing out the internal combustion engine and manufacturing only electric or hybrid vehicles by 2019 is considered a milestone in the evolution of the EV sector. A spokesperson at Volvo Cars India said he is not aware of Geely’s India entry plans.
Indian auto firms were warned by the government last week to switch to production of vehicles that run on non-polluting alternative fuels or risk being overtaken by inevitable policy change.
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