JSW pulls the plug on EVs, but the reasons remain a mystery

It was one of the most intriguing electric vehicle (EV) projects simply because its manufacturer was not into automobiles.

Yet, that was no deterrent to the Sajjan Jindal-led JSW Group, which had announced with much fanfare over 18 months ago that it was getting into EVs. Here was a new entrant in a space already creating waves in India thanks largely to the Centre’s initial bombastic plan of creating a 100 per cent electric automotive ecosystem by 2030.

And even while established car-makers were a lot more circumspect with this audacious objective, JSW decided to throw its hat into the ring. This was a player whose expertise lay in areas like steel and power but was still keen on pushing the envelope in an all-new domain.

The Centre had, meantime, steered clear of its 100 per cent electric objective and the talks that began doing the rounds within Delhi’s political circles now spoke of a more realistic 40 per cent. Nobody was really sure what the actual figure was but the fact that fossil fuels would not be wiped out completely in a decade was comforting news to established players.

In this backdrop, JSW (through its arm JSW Energy) was still making news on its EV project. There were reports doing the rounds that Gujarat and Maharashtra were being considered prime locations. Likewise, the grapevine buzz suggested a Chinese ally (the same being touted was Geely) but there was really no official confirmation coming in. Even more dramatically, there was news suggesting that the group was in talks with General Motors to buy out its Talegaon plant near Pune for its EV project. The American auto brand had already announced in April 2017 that it was putting an end to retailing cars in India.

Consequently, it decided to shut its decades-old plant in Halol, Gujarat, and focus on producing cars at Talegaon for export markets. To industry observers, it was now only a matter of time before GM decided to permanently bid adieu to India. After all, what was really the big deal in exporting cars from the world’s most happening automobile market (after China) when there was no local sale happening?

To that extent, the fact that JSW Energy was in talks with GM seemed credible news and it seemed as if Talegaon would shift to a new owner gearing up for an all-new foray. What then caused such a volte-face especially days after the Centre had announced its FAME II policy which, on the face of it, earmarked a larger outlay for EVs even while a lion’s share was set aside for public transport?

Clearly, one big reason was that the JSW Energy project was just not viable enough to justify investments of over ₹5,000 crore. As much as the group has not specified details, it hinted that there were too many uncertainties in the EV business, which meant that the numbers did not add up.

It is equally likely that there were apprehensions about the availability of adequate fiscal sops from different States to make the JSW offering affordable to the end-user. Going by the Indian experience with EV cars, where Mahindra & Mahindra has been the prime mover, the big numbers are still elusive.

Did market research also tell JSW Energy that anxieties about adequate availability of charging infrastructure across every nook and cranny of India were justified? After all, this has remained a nagging concern for manufacturers in addition to other issues relating to raw material availability, battery costs and, of course, generous fiscal sops.

More importantly, in recent times, the brouhaha about EVs has pretty much subsided within the policy think-tank net in New Delhi. For now, industry has its hands full with the more imminent challenge of Bharat Stage VI emission norms, which are barely a year away from now. Nobody is really discussing electric with the same levels of enthusiasm that was the case a year ago.

It is also election season now and the next couple of months will see frenzied political campaigning across the country. After all, the stakes are high for everyone concerned even while the present pace of economic growth is cause for concern. Put all these uncertainties together and it perhaps explains why JSW Energy called off its EV plans. Whether it will revive it at some point later remains to be seen.