JSW-MG Motor JV to introduce ‘new energy’ vehicles every three to four months

A new automobile joint venture of the JSW Group and MG Motor India will introduce a 'new energy' vehicle every three to four months beginning September, a top executive said, rolling out top-end "cars that India has not seen".

The JV partners have agreed to invest $750 million (about ₹5,000 crore) to produce 300,000 units a year, make more parts locally, and bring in technology for new products.

JSW will hold 35% stake in the new company, which will be called JSW MG Motor India Pvt. Ltd. Financial investor Everstone, a few dealers, and employees will hold round 16%, taking the shareholding of Indian investors in the JV to 51%. The investment in the JV is expected to go up to $5 billion by 2030, said JSW officials.

“We will bring one newly designed new energy vehicle every three-four months from September onwards. These will be state-of-the-art cars that India has not seen,” said Sajjan Jindal, JSW chairman. “We will also export them to the most advanced international markets. That's my dream and we're working on that.”

The JV will sell vehicles under the MG brand name, said Rajeev Chaba, chairman emeritus, MG Motor India. The joint venture gives MG Motor, a London-headquartered company owned by Chinese state-owned automaker SAIC Motor, much-needed firepower to expand in the country.

The company will also start a premium channel for high-end vehicles in India, Chaba said. 

The Union government last week said it would allow automakers to import up to 8,000 EVs priced $35,000 or higher every year at a reduced import duty of 15%, from 70% earlier, if they commit to investing at least $500 million in India over the next three years to make parts locally.

“We have to study the policy fineprint,” said Parth Jindal, managing director of JSW Cement.

“It looks very attractive for the premium segment, but because we have other applications in place—some have already been applied to by MG Motors, and JSW has applied for (the government's production-linked incentive scheme) on the battery side. So we'll have to see if those get impacted at all by the new policy,” Parth Jindal said.

According to Sajjan Jindal, the JV will look to introduce plug-in hybrids that will have batteries with a range of 150 km to expand the new energy vehicle market till EV charging infrastructure fully develops in India.

The JSW-MG Motor India JV estimates India's passenger vehicle market to reach 10 million units by 2030 with EV adoption following the same path as it did in China. India's EV penetration currently stands at 2% of all passenger vehicle sales, whereas in China, 32% of all vehicles sold last year were EVs or hybrids.

“Our aim is to have a 33% EV market share by 2030 and sell 1 million EVs by the end of the decade,” Sajjan Jindal said. “Technology from SAIC, and the manufacturing prowess from the JSW group will make it an unmatchable team. My dream is to create a Maruti moment for new energy vehicles.”

Global EV sales have seen a lull so far in 2024. EV sales in January dropped 26% from December. However, sales of electric cars have been on a yearly upswing despite this slowdown. 

According to Chaba, demand for EVs remains strong and the 'slowdown' only reflects a gap between expectations and projections for EV growth, versus a more realistic market scenario.