JSW Group, a prominent Indian conglomerate with interests spanning from steel to energy, is reportedly in preliminary discussions with South Korea’s LG Energy Solution (LGES) regarding potential collaboration in manufacturing electric vehicle (EV) batteries in India. This development underscores JSW’s commitment to establishing a local production ecosystem for EVs in India.

Sources familiar with the matter revealed that senior executives from JSW engaged in talks with LGES in Korea earlier this month. The proposal on the table involves a partnership aimed at producing battery cells in India, catering to the EV and energy storage sectors.

Both LGES and JSW have chosen not to comment on the ongoing discussions at this stage.

In addition to LGES, JSW is reportedly engaging in conversations with other major players in the battery industry, including China’s CATL and Japan’s Panasonic and Toshiba. These discussions are part of JSW’s broader strategy to create a robust local supply chain for EVs, encompassing various components such as storage, motors, and battery management systems.

A source close to JSW’s EV plans noted, “Due diligence-wise, JSW is talking to a lot of people because it needs an ecosystem for an EV. It is looking at storage, motors, battery management.”

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LGES, known for supplying battery cells to prominent automakers like Tesla and General Motors, has requested that JSW share detailed requirements for EVs and energy storage, as per one of the sources.

Another source familiar with JSW’s EV ambitions indicated that the company envisions establishing a battery manufacturing facility capable of producing 20 gigawatt-hours (GWh) of battery capacity in phases by the end of this decade. The initial phase is expected to comprise 8 GWh of production capacity.

It’s worth noting that JSW’s chairman, Sajjan Jindal, has publicly expressed his desire to enter the EV market. The company has explored various avenues, including talks about buying a stake in China’s MG Motor. However, recent reports suggest that discussions with MG Motor have been put on hold, and JSW is now in talks with Chinese automaker Leapmotor to license technology for building EVs under its own brand in India.

While Panasonic declined to comment on its involvement in discussions with JSW, Toshiba stated that it could not confirm any talks at this point. CATL did not respond to requests for comment.

These discussions are still ongoing, and the sources requested anonymity as no final decisions have been made yet.

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Battery Incentives and India’s EV Market

India’s electric vehicle market is in the early stages of development but is experiencing steady growth. Tata Motors, an Indian automaker, currently dominates EV sales in the country. Electric vehicles accounted for less than 2% of total car sales in India last year, but the government, led by Prime Minister Narendra Modi, has ambitious plans to increase this to 30% by 2030. To incentivize local production of batteries and other EV components, the government is offering substantial incentives to companies and working on a new EV policy that includes lower import taxes in exchange for investments in local manufacturing.

Tesla has also expressed interest in the Indian market and is in discussions with the government regarding EV and battery production in the country.

LGES’s interest in India aligns with its efforts to expand its presence in the third-largest automotive market globally. The company established an office in New Delhi earlier this year, with a focus on growing its presence in India’s automotive, mobility, and energy storage sectors. LGES already supplies battery cells to Indian electric scooter manufacturers, including Ola Electric and TVS Motor.