JSW Group, Volkswagen begin talks to set up electric vehicle joint venture

The JSW group has started talks with German auto major Volkswagen AG on supplying technology and components for its Rs 40,000 crore electric-vehicle (EV) project in Odisha.

Talks with JSW came within days of the German carmaker announcing it would supply components for EVs and battery cells to Mahindra & Mahindra.

Mahindra is planning to launch electric sport-utility vehicles in December with components from Volkswagen’s MEB platform and unified cells.

A source close to the development said a high-level team of Volkswagen AG made a presentation to the JSW group brass, including Chairman Sajjan Jindal and scion Parth Jindal, on Tuesday about the technology developed by the German car major.

The EV project of the group is being set up by private entities of the Jindal family and does not include any listed entities. The group would also look at inviting financial investors for projects in the future, said the source.

When contacted, a Volkswagen group spokesperson declined to comment. “We refrain from providing comments on market rumours and speculation,” the spokesperson said.

“The Volkswagen Group is one of the most successful vehicle manufacturers in the world. Within the Volkswagen Group, Škoda Auto is responsible for the important Indian market. We are always exploring new business opportunities worldwide, however, please understand that we generally do not comment on speculative news,” a Skoda Auto Volkswagen India Private (SAVWIPL) spokesperson said.

The group has also signed a joint-venture (JV) agreement with MG Motor, a company owned by SAIC Motor Corp of China, to pick up a 35 per cent stake to manufacture electric cars. Due diligence for the project is underway with JSW officials looking at MG Motors’ Halol (Gujarat) facility, the source said.

“There will be separate JVs for cars, battery manufacturing and other components with the JSW group,” said a source. The Odisha project consists of a 50 Gwh EV battery plant, EVs, a lithium refinery, a copper smelter and manufacturing related components. The project will manufacture both commercial vehicles and passenger cars.

“We seek to redefine the way people commute and power their lives by enhancing EV penetration,” Sajjan Jindal said recently in an email to this newspaper.

According to industry estimates, the price difference between electric cars and ICE (internal combustion engine) vehicles is almost 30 per cent. The group plans to bring the two categories on a par, said a source in the group.

The cars would be priced at around Rs 20 lakh.

China sold 10 million EVs and India a little more than 100,000 in 2023.

According to Jindal, China has set up a 2,000 Gw battery plant but India has not set up a 1 Gw plant.

India’s largest car manufacturer, Maruti Suzuki India, is also planning to enter the EV market. Tata Motors and Mahindra & Mahindra are selling passenger cars but the volumes are not high.