Asian Steel Giant Joins the Electric Vehicle Market in India as Tesla and BYD Remain Absent

JSW Group, a leading steel producer from India, is planning to invest $4.8 billion to build an electric vehicle and battery manufacturing plant. This move comes as both domestic and international companies race to gain a foothold in India’s emerging electric vehicle market, which still lacks the presence of two electric vehicle giants, Tesla from the United States and BYD from China.

JSW Group’s Chairman, Sajjan Jindal, stated that the conglomerate aims to produce 100,000 commercial vehicles and 300,000 passenger vehicles annually. The plant will be constructed in the eastern state of Odisha.

On February 10th, the company announced that it had signed a Memorandum of Understanding with the state government for an electric vehicle-related project, which is expected to create 11,000 jobs.

While the project’s start date has not been disclosed, JSW Group also plans to establish an electric vehicle battery manufacturing plant with a capacity of 50 gigawatt-hours. Additionally, JSW plans to invest in over 30% of the Indian subsidiary of MG Motor, which is owned by China’s SAIC Motor. There are also reports that JSW is negotiating with Volkswagen to form a joint venture in the electric vehicle business.

“We want to revolutionize the automotive industry by producing high-quality electric vehicle batteries and vehicles, which are not only affordable but also incorporate advanced technology,” said Jindal.

India’s automobile market is witnessing strong growth. The sales of new cars, including both passenger and commercial vehicles, increased by 7% in the past year, reaching over 5 million units. According to the Federation of Automobile Dealers Associations, more than 80,000 electric vehicles were sold in India last year, double the number in 2022.

The Indian government is actively promoting the adoption of electric vehicles through subsidies and other measures. The country has set a target to increase the proportion of electric vehicles among all cars to 2% by 2030, up from the current 1%.

According to the Global Strategy Institute of Mitsui & Co. in Japan, India is expected to have a 20% electric vehicle adoption rate by 2030, equivalent to over 1.4 million vehicles.

The Indian electric vehicle market is rapidly expanding, creating opportunities for companies like JSW. This has led to intensified competition.

According to GlobalData, Tata Motors, an Indian automobile manufacturer, will lead the Indian electric passenger vehicle market by 2023, capturing 72% of the market share. In 2021, Tata announced a plan to raise INR 7,500 crore in stages from TPG Rise Climate, a climate change fund, and other sources. They also plan to launch 10 electric vehicle models within the next 5 years. In January, the company opened a dedicated electric vehicle showroom near New Delhi.

Meanwhile, electric vehicle giant Tesla is still absent from the Indian market due to ongoing negotiations with the government regarding import duties. Similarly, BYD from China has not yet established a formal presence in India due to geopolitical tensions.

Other companies in the industry are trying to fill this gap. Indian automaker Mahindra & Mahindra announced in February that it had signed an agreement to purchase electric vehicle components from Volkswagen.

Vietnam’s VinFast has recently broken ground on a new electric vehicle plant with a total investment of $2 billion in Tamil Nadu. Maruti Suzuki, India’s largest automaker, plans to start electric vehicle production in Gujarat in 2024.

With the absence of Tesla and BYD, companies like JSW Group are capitalizing on the opportunity to enter the Indian electric vehicle market. The industry is experiencing rapid expansion, and the competition is becoming more fierce.

This article was originally published on Business Today.