JSW Group dusts off electric vehicle plan after 3 years


Sajjan Jindal’s JSW Group is considering manufacturing electric cars again, reviving a plan abandoned in 2019.

The crucial difference this time is that JSW is incubating the electric vehicle business under a private group entity, unlike its previous bid to house it under JSW Energy, a person aware of the development said.

The move to revive its EV plan doesn’t sit well with its core businesses in manufacturing steel, cement, paints and electricity, which have strong synergies, but the group’s flagship companies, JSW Steel and JSW Energy, have been investing in renewable energy in recent years.

JSW Group has approached states that are business-friendly about the possibility of building a factory and the likely incentives, the person cited above said, seeking anonymity. The group is yet to shortlist a technology partner, and the plans are still in the early stages, the person added.

A JSW Group spokesperson declined to comment.

Earlier, JSW Group, through JSW Energy, had hired Rakesh Srivastava, a senior automobile executive from Hyundai Motor, to be part of its senior team. Srivastava later left JSW Group to join the Japanese carmaker Nissan’s Indian subsidiary. At that time, JSW was negotiating to buy General Motors’ Talegaon facility.

However, in March 2019, JSW Energy decided to abandon the plan due to uncertainties in the EV industry and save cash for emerging opportunities in the power sector.

The person mentioned above said the reason for bringing EVs back on the table is that technology is now more accessible and affordable, and the push and demand from consumers for EVs are maturing fast.

To be sure, Tata Motors is now India’s EV market leader, selling 4,451 electric cars in November, with a market share of 83%. When JSW Group had put the lid on its EV plans, electric car sales were negligible. Mahindra Electric cars are expected to give Tata Motors competition by FY24. Tata Motors and Mahindra Electric have successfully raised funds for their electric car plans. This is likely to be a route for JSW if it decides to pursue its electric car plan and make substantial progress in its project.

In case JSW decides to go ahead with its EV project, it will need to build a new team, which may take at least a couple of years before it gets a semblance of shape.

JSW Group will house it in a private entity and will require patient capital in the region of $500 to $750 million.

When it abandoned the EV move in 2019, JSW Energy explained the decision as a step in line with “prudent risk management”.

“Given higher than anticipated uncertainties associated with the EV business, the board has, after careful evaluation, decided not to pursue this business and maintain capital cushion for growth opportunities in the power and other related businesses,” the company had said in a notification to stock exchanges.

JSW Group’s strategy is in line with other Indian conglomerates—Mukesh Ambani’s Reliance Industries, Gautam Adani’s Adani group, and Anil Agarwal’s Vedanta, which are all focusing on renewables.

While Ambani and Adani are betting billions into manufacturing green hydrogen, making solar panels and giga-factories for storage batteries, Anil Agarwal’s Vedanta, through its unlisted entity, is investing billions of dollars into semiconductors.

JSW’s strategy will be more directed to meet the demand of retail customers.

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