Infrastructure group JSW plans to diversify into electric car manufacturing, two sources told Reuters, as Centre boosts support for non-polluting vehicles.
Electric vehicles that use expensive batteries have failed to take off in India due to cost-consciousness and power-deficiency, despite the sector enjoying incentives like low taxes from the government that has set a goal of raising the number of such vehicles to up to seven million units by 2020, from just around 20,000 now.
But debt-laden JSW believes government help – as promised by Transport Minister Nitin Gadkari on a visit to the US electric carmaker Tesla Motors’ factory near California this year – and its own supply of steel can make its cars more competitive, said one of the sources with knowledge of the matter.
Mahindra and Mahindra is the only Indian firm that makes electric cars, but sales have been softer than expected.
JSW’s electric car plans have been endorsed by Gadkari, said the source. Gadkari, in his US visit, offered to help Tesla set up plants in India and seek local partners, according to a statement from his ministry.
Another source close to JSW said the company was “aiming for technology like Tesla” but declined to say if a tie-up with the US carmaker was on the cards.
JSW has already set up a team of around eight officials working on the car project for the past few months, and the company has interviewed a handful of Indian-born automobile executivesto head the division, including one official with Nissan in Japan, said the first source.
Seshagiri Rao, finance head of the JSW Group that is one of India's most indebted conglomerates, said he did “not want to comment at this stage.” The second source said JSW had also been talking to officials at the heavy industries ministry about setting upcharging stations across the country.
It is not clear if JSW plans to build the charging points, but the ministry says on its website that it could spend around$2 billion by 2020 to increase the penetration of electricvehicles, including by “promoting charging infrastructure.”
An official at the ministry, who did not want to be named, confirmed that JSW had discussed the plans with it although no final proposal had been made yet.
