JSW Group, which is setting up a Rs 4,000 crore electric vehicle (EV) plant in Gujarat, is likely to partner with Chinese multinational automotive giant Zhejiang Geely Holding Group Co Ltd for the project. A formal announcement regarding this is expected around December. Sources said that the joint venture (JV) is likely to be a 50:50 one.
A mail sent to JSW remained unanswered.
In September, JSW Energy, part of the Sajjan Jindal-led Jindal Group, signed a memorandum of understanding (MoU) with the Gujarat government to set up a Rs 4,000-crore EV manufacturing facility in the state that will have a capacity to make 200,000 EVs per year in the initial stages. The capacity is likely to be ramped up to 500,000 units in the subsequent phases, said state government officials.
The plant would not only make EVs but also manufacture batteries, electric storage solutions and charging infrastructure. Sources indicated that the JV would look at making premium EVs (priced around Rs 12-15 lakh and above) and not mass market cars for the Indian market.
The car has been designed with a very simple engine and was expected to have minimal wear and tear. “It is expected to give a mileage of 7 km per unit of power. Assuming power cost to be around Rs 7 per unit, the cost of running the car would be Re 1 per km,” a source said.
The proposed investment by the JV is around $1 billion or so. Zhejiang Geely Holding Group would be the technology partner for the project. JSW has been in talks with Geely for a while now.
Headquartered in Hangzhou, Zhejiang Geely Holding Group is a multinational automotive behemoth that owns Geely Automobile Holdings Ltd, Volvo Car Group and the London Taxi Company.
In its September corporate presentation Geely Automobile Holdings Limited has said that it is strategically focussing on 'new energy' vehicles. Its Emgrand EV has sold around 4,000 units in August this year. The car has a 253 km range per charge and has a top speed of 140 km per hour. The Emgrand EV also comes with two charging options - a slow one (14 hours) and a fast one (48 minutes).
Geely Automobile Holdings Ltd has sold 711,320 units in its domestic market between April to August 2017, up 94 per cent year on year. The company sells 10 major vehicle models and exports mainly to developing countries in the Middle East, Asia, Europe and Africa. In November 2015, the company announced its new energy vehicle strategy named 'Blue Geely Initiative' displaying its dedication to transformation into an industry leader in new energy vehicle technologies.
It generated revenues of about RMB 53.72 billion in 2016 and has a total market capitalisation of HKD 97.72 billion as on May 9, 2017.
For a non-automobile firm like JSW, it is an imperative to partner with a major technology provider like Geely. China is also one of the largest EV markets in the world.
Abdul Majeed, partner, automotive, PwC felt that as one moves towards the electric mobility vision, there is a lot of scope for innovation on battery costs and safety parameters. "Thus there is scope for new players to come in and there would be a paradigm shift in the terms of the automotive market dynamics," he said.
India has set an ambitious target of all-electric vehicles by 2030 and this has set the ball in motion for new players entering the sector.