JSW Group doubles down on EVs with plans for e-buses and e-trucks

The steel behemoth is looking to finalise a partner to manufacture electric buses, and eventually electric trucks, in Odisha, where it has committed an investment of ₹40,000 crore to set up an integrated EV manufacturing facility, Parth Jindal, managing director JSW Cement and JSW Paints, told Mint.

Parth Jindal, along with Sajjan Jindal, is steering the JSW Group’s entry into the automotive sector, particularly in the new energy vehicle, or NEV, space—a term popularised by Chinese manufacturers of electric vehicles, plug-in hybrids, and hydrogen-powered EVs. 

India’s public transit system is undergoing an expensive although necessary electric overhaul, with the government pushing for a widespread shift to electric buses, replacing old and polluting diesel buses—a crucial step in India meeting its net-zero emissions goals. The JSW Group, with its expertise in steel and its planned venture into batteries, is expected to leverage these synergies to drive down costs.

JSW is seeking to establish a 6 gigawatt hour (GWh) lithium-ion cell manufacturing plant in Odisha in about 18 months, eventually expanding it to 10 GWh. The cell-to-pack battery manufacturing plant will be JSW Group’s first manufacturing facility in Odisha in the EV space.

JSW has also applied to be selected for the government’s production-linked incentive (PLI) scheme for advanced chemistry cells.

“We are learning the automotive industry and therefore we want to bring in partners. There is a bunch of companies we are talking to,” Parth Jindal told Mint. “We want to start with manufacturing electric buses, and then trucks. Our local cell-manufacturing will bring us a cost-advantage.”

While electric buses have managed to find a commercial business case, thanks to generous government subsidies, a product-market fit is yet to be found for electric trucks. 

“Electric buses have seen significant deployment in state public transport units thanks to subsidies under the FAME scheme. We expect that electric buses will account for 20-25% of the bus market by 2025,” said Hemal Thakkar, director of transport, logistics and mobility sector at Crisil. 

FAME stands for the Faster Adoption and Manufacturing of Electric (and hybrid) vehicles in India, a subsidy program launched by the Union government to promote electric vehicles.

Meanwhile, the PM eBus Sewa Scheme, launched in August, aims to increase the number of electric buses deployed on Indian roads. It’s $2.4-billion fund will be used to deploy 10,000 e-buses across 169 cities by 2026.

A revamped FAME policy will also include additional incentives for electric buses, particularly those that ply between different cities, according to government officials.  

The e-bus market is dominated by Tata Motors, Ashok Leyland’s e-mobility arm Switch, Olectra Greentech Ltd, and JBM Auto Ltd, all of which have participated in the government’s national electric-bus programme. 

The market for e-trucks, however, is relatively nascent. There are no companies selling large electric trucks due to various practical challenges, including a significant cost differential versus conventional trucks. 

“Electric trucks could cost 2.5-3 times of diesel trucks, practically pricing them out of the market without significant government support in terms of subsidies. These trucks also need very large batteries, which eats into the payload capacity of the vehicle, further affecting their practicality,” Crisil’s Thakkar said.  

What does make commercial sense are smaller electric cargo haulers, with up to 3.5 tonnes in terms of gross vehicle weight, he said.

“We expect that this segment will gather momentum in the next one year. By 2030, electric small commercial vehicles could see 18-20% market penetration,” Thakkar added.  

The segment will get an impetus from large companies looking to cut emissions in their supply chains, including e-commerce players, to lower their net carbon emissions, according to Thakkar.

While the Tata Ace EV is an electrified version of one of Tata Motors’ best-selling small commercial vehicle, the Tata Ace, Ashok Leyland’s Switch Mobility has built a grounds-up new electric platform in the 2-to-3.5-tonne segment. 

Mahindra and Mahindra Ltd, which is a leader in electric three-wheelers, plans to launch its first line-up of electric four-wheeler commercial vehicles in 2025.