Sajjan Jindal-led JSW Energy today unveiled its plans to foray into the electric vehicles (EVs) and energy storage segments and said it will invest up to Rs 4,000 crore in the project over the next three years.
The company expects to roll out its first electric vehicle by 2020, JSW Energy Joint Managing Director Prashant Jain told reporters here after the announcement of June quarter earnings.
The energy major today reported a 40 per cent decline in its consolidated net profit to Rs 217.18 crore in the first quarter ended June 30, mainly on account of higher fuel costs and dip in revenues.
"Being a large conglomerate, our aim is to keep looking at growth opportunities. Today, the scope in power business is limited and therefore we decided to make an entry into the electric vehicles and energy storage and charging stations segments," Jain said.
He said the company has envisaged an investment of up to Rs 4,000 crore over the next three years for setting up manufacturing facilities for producing cars, energy storage batteries and creating charging stations.
"We hope we will roll out our new car under the JSW brand by 2020. We will also look for technology partnering for the same," Jain said.
JSW group has announced its foray into the segment at a time when the government is aiming to ensure all-electric car fleet in the country by 2020.
Mahindra Group is currently the only player in the electric vehicles segment in the country.
The government is aggressively trying to push sales and production of electric vehicles in the country through schemes such as FAME India, which have caught the fancy of Chinese automobile manufacturers such as BYD and SAIC that are already investing heavily in electric technology.
Electric and hybrid vehicles along with alternative fuel like ethanol are gaining traction as part of efforts to reduce India's crude oil import bill.
The NITI Aayog report estimates that India can conservatively save up to 64 per cent of anticipated passenger mobility-related energy demand and 37 per cent of carbon emissions by 2030.
At current oil prices, this will imply a net fuel cost saving of approximately Rs 3.9 lakh crore by 2030, the report said.
With an aim to promote eco-friendly vehicles, the government had launched the FAME India scheme in 2015 offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars.
The company is also evaluating the locations, where it could set the car manufacturing facilities, Jain said.
"We are looking at states like Maharashtra, Gujarat, Rajasthan, Tamil nadu and Andhra Pradesh for this. We want 60 per cent of manufacturing should be localised," Jain said.
When asked about its plans to fund the project, he said it would be done through a mix of debt equity and internal accruals.
"We have a comfortable debt equity ratio and we are working towards reducing it further. Additionally we have good cash flows. This will help us fund this project. As the demand in the EVs segment and its adjacent businesses is significant, we decided to enter this space and create a total disruption in the IC engine car market," Jain said.
He further said that the charging station infrastructure and other associated businesses will not only be integrated for the power and EV businesses, but will also operate on a standalone basis for mobility and static applications.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)