India's steel-to-energy JSW Group is in early talks with Chinese automaker Leapmotor to license technology to build electric vehicles in India, according to people familiar with the discussions.
Under the technology licensing agreement, JSW would use Leapmotor's platform — the structural underpinnings of a car on which it is built — to manufacture EVs in India under its own brand name, the sources said, in the company's second attempt to enter the growing business.
JSW is likely to use a single platform on which it can build at least three mid-sized sport-utility vehicles (SUVs), one of the sources said, adding that Leapmotor will also engineer the cars for the Indian company.
The sources did not say when production might begin.
The group has also been in talks to buy a stake in MG Motor India, owned by China's SAIC Motor, for its EV push in the country but those discussions have slowed, the person added.
India's EV market is small, with Tata Motors dominating sales that made up less than 2 percent of all cars sold last fiscal year. But growth is rapid and the government wants to boost EV sales to 30 percent of the total by 2030.
"JSW wants to sell cars under its own brand for which they need the technology more than an investment or joint venture in an existing carmaker," said one of the people, adding that it had been in talks with a few other Chinese automakers as well.
All sources declined to be identified as the talks are still ongoing and a final decision has not been made.
Leapmotor declined to comment.
While JSW declined to comment, its billionaire chairman Sajjan Jindal has publicly talked about his intention to build EVs and its discussions with MG Motor. The company made its first attempt to get into EVs in 2016.
Indian media reported this week that JSW is in talks with Chinese companies for technology and is also in discussions to acquire Ford Motor Co's southern India plant where it stopped production last year after exiting the market.
Details of talks with Leapmotor have not been reported previously.
Tesla is also eyeing the market and is in talks with the Indian government to set up a factory there to build affordable EVs. The government is also working on a new scheme to attract EV makers by offering them lower import taxes in return for investment in local manufacturing.
Founded in 2015, Leapmotor has less than 2 percent share of China's fragmented EV market, where it sells four mass market electric models. In August, it unveiled a new EV platform which it wants to license to other automakers.
A deal with JSW would be an opportunity for Leapmotor to earn revenues from the Indian market at a time when Chinese companies have struggled to set up manufacturing in the country after New Delhi tightened foreign investment rules from neighbouring countries, one of the sources said.
This has also forced MG Motor India to find local investors like JSW so it can raise equity.
Leapmotor also has been in partnership talks with other major automakers, including Stellantis and Volkswagen, according to media reports.
© Thomson Reuters 2023
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