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India’s biggest steel producer JSW and Chinese carmaker SAIC Motor on Wednesday launched a $1.5bn joint venture to build and sell MG-brand electric vehicles in the world’s most populous country.
The partners plan to invest $5bn by 2030 and cut costs by increasing local sourcing, including of batteries from a plant to be built in India’s eastern Odisha state by JSW, the Indian group’s chair Sajjan Jindal told the Financial Times.
“As JSW we had been looking to get into the automobile industry, especially when new energy vehicles are becoming more popular and more important,” Jindal said. “We were scouting around for the technology and came across MG.”
EVs, a technology in which China is seizing a global lead, have been slow to take off in India, in part because the models available are more expensive than combustion-engine cars.
JSW, a family-owned conglomerate, and other Indian partners will own 51 per cent of the joint venture, which will be called JSW MG Motor India. SAIC will own 49 per cent, as it dilutes control of its Indian unit. JSW and MG told a launch event in Mumbai on Wednesday that they planned to bring out a new model every three to six months over the next three years, starting in October.
Chinese companies, including carmakers, have been held back from expanding in India or been pushed into partnerships with local JV partners by Narendra Modi’s government since 2020, when clashes with Chinese troops at the border killed 24.
That year New Delhi introduced a new requirement for investors from countries with which India shares a land border, including China, to seek government permission before investing.
JSW said it aimed to bring down the cost of MG’s EVs by supplying its own steel, in addition to batteries, and carrying out more research and development in India.
Jindal said the venture depended on MG for technology and that it wanted to, by 2030, “totally indigenise, even the R&D”.
MG’s EV sales in India are a distant second to Tata, which controls roughly 70 per cent of the nascent market, according to GlobalData. Battery-powered vehicles are set to account for only about 4 per cent of India’s passenger vehicle sales this year, according to the research group.
However, the announcement of the venture comes amid signs that India’s EV market is beginning to take off.
Vietnamese EV brand VinFast in January announced plans to build vehicles in the southern state of Tamil Nadu. Tesla Motors, whose chief executive Elon Musk met Modi in the US last year, has held talks with the government on building a factory in the country. Suzuki, India’s top-selling carmaker, plans to begin producing and exporting its first Indian-made EVs this year, the company has said.
“You have all the major players coming in, so sales for EVs are going to increase,” said Ammar Master, director of South Asia automotive with GlobalData.
JSW and SAIC’s new JV will benefit from the Indian government’s move last week to cut import tariffs on higher-priced imported EVs for companies that invest in local production.
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