JSW, SAIC discuss fresh capital as MG Motor plans its next growth phase

Shareholders discuss fresh funding as Parth Jindal says the Halol plant can scale to 400,000 units; carmaker targets 100,000 sales in CY26 and expands its new-energy vehicle play

The JSW group and China's SAIC Motor are discussing the next round of capital support for JSW MG Motor India as the automaker looks to expand manufacturing beyond the 220,000-unit annual capacity already planned at its Halol facility and widen its new-energy vehicle (NEV) portfolio.

 

The company, which is investing around ~3,500 crore in capacity, localisation and new products, ultimately sees scope to expand the Halol facility to around 400,000 vehicles annually. Beyond that, JSW MG has an ambition to scale to one million vehicles, Parth Jindal, managing director (MD), JSW group, said on Wednesday.

 

“We really want to go beyond 220,000, which is not enough for MG with the way the market has received us. We are very excited and we want to scale to 400,000 and then get to a million cars. And for that you will need capital,” Jindal said.

   

JSW currently owns 35 per cent of JSW MG Motor India, while SAIC holds 49 per cent. The remaining equity is held by Indian financial institutions, dealers, and employees.

 

The existing ~3,500 crore investment programme is being funded through a mix of debt and equity, including funds remaining from JSW's original investment in MG. However, expansion beyond the currently approved programme will require the shareholders to decide on the next round of funding.

 

“The discussions between both shareholders are well underway,” Jindal said, while declining to comment on whether the talks could result in a change in their respective shareholdings.

 

He added that the recent easing of restrictions under Press Note 3 could open more avenues for SAIC to invest in the Indian venture. Both shareholders remained keen to support the business, he said. Under Press Note 3, investments in Indian companies from entities based in countries sharing a land border with India, including China, require prior government approval.

 

As growth matures in China and Europe, SAIC views India as its next major growth market, with its JSW partnership providing a crucial edge in localising operations and navigating the Indian market.

 

The expansion comes as MG targets another sharp increase in volumes. Jindal expects the company to surpass 95,000 vehicles in calendar year 2026 (CY26) and target the 100,000 unit milestone, up from approximately 70,500 vehicles in CY25.

 

“Our aim is to continue to grow our volumes 35-40 per cent,” he said, adding that increased localisation would also be critical to improving profitability.

 

Capacity at Halol is currently around 110,000 units annually. Jindal said this would increase to 160,000 units by March 2027 and 220,000 units by January 2028. The company has completed master planning that would allow the same site to eventually produce around 400,000 vehicles annually.

 

Jindal said the company does not see the need for another manufacturing location for at least the next three to four years. A decision on another plant could be considered when volumes move beyond roughly 250,000 units, he added.

 

MG is already running Halol in three shifts as it tries to increase output. Production has moved from around 8,000 vehicles a month a few months ago to 9,000 last month, with the company targeting 9,500 this month before progressively moving towards 10,000-12,000 units a month.

 

The company's own ~3,500 crore investment is being supplemented by about ~2,500 crore of investment by its vendors, taking the overall investment associated with the expansion to around ~6,000 crore, Jindal said.

 

Localisation will be a key part of this expansion. The company is targeting around 70 per cent localisation for both the Windsor and the newly introduced Hector Tomahawk by the end of CY27. Battery cells, rare-earth magnets, and some electronics remain among the key components that cannot currently be sourced locally at the required level.

 

ADAPT to drive next phase of growth

 

MG's next phase of growth will also be anchored by ADAPT — Advance Drive Architecture Platform Technology — its modular multi-new-energy vehicle architecture. The platform can support battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and extended-range electric vehicles (EREVs).

 

Anurag Mehrotra, MD, JSW MG Motor India, said the multi-powertrain strategy was aimed at addressing different consumer needs, particularly buyers who want the running-cost benefits of an EV but also undertake longer journeys.

 

MG plans to use ADAPT for EVs and PHEVs, and is also evaluating EREVs. In an EREV, the wheels are driven only by the electric motor, while a smaller internal-combustion engine (ICE) acts as a generator to recharge the battery, reducing range anxiety.

 

“EREV is definitely something that we would like to bring. We can bring it, and we want to bring it,” Jindal said.

 

Jindal also pitched for differential taxation for such new-energy technologies. While pure EVs attract 5 per cent goods and services tax (GST), PHEVs are taxed at 18 per cent or 40 per cent, depending on vehicle size and engine specifications. He said the government's approach appeared to distinguish between vehicles where the engine can directly drive the wheels and EREVs, where it only generates electricity.

 

Jindal said lower taxation could accelerate adoption of PHEVs and EREVs, while acknowledging that they need not necessarily receive the same 5 per cent rate as pure EVs.

 

“Then don't make it 5 per cent, make it 18 per cent, no problem... But the consumer should get it cheaper,” he said.

 

While MG will continue selling ICE vehicles, NEVs will remain at the centre of its growth strategy.

 

Mehrotra has previously said the company expects NEVs to account for around 70-80 per cent of its sales, with multiple powertrain technologies required to expand the addressable market.

   

JSW puts 30 GWh battery cell plan on hold

 

The JSW group has put its proposed 30 gigawatt-hour (GWh) battery cell manufacturing project on hold as it has yet to secure a technology partner for lithium-iron phosphate (LFP) cells, group Managing Director (MD) Parth Jindal said.

 

“We are very keen to make cells in India, but the LFP technology is currently not available for us, and the hunt is on for a technology tieup. We have not yet secured a technology tieup and hence that project currently is on hold,” Jindal said.

 

JSW had planned to invest over $1.3 billion in the 30 GWh project, beginning with a 10 GWh first phase.

 

The group has, however, commissioned cell-to-pack assembly facilities for JSW Energy's battery-storage business as well as for JSW MG Motor India.

 

Jindal said access to LFP cell-manufacturing technology remains heavily concentrated in China, making a technology tieup the key hurdle to taking the cell project forward.