Indian steel energy company JSW Group is in early talks with Chinese automaker Leapmotor to license technology to manufacture electric vehicles in India, according to people familiar with the matter.
Under the technology licensing agreement, JSW will use Leapsport’s platform, the structural basis of Leapsports, to produce its own brand of electric vehicles in India, the sources said, marking the company’s second attempt to enter the growing business. .
JSW is likely to use a platform to build at least three mid-size sports utility vehicles (SUVs), one of the sources said, adding that Leap Motors will also design the cars for the Indian company.
The sources did not say when production would start.
The group has also been in talks to buy a stake in China’s SAIC Motor’s MG Motor India to boost its EV business in the country, but those discussions have slowed, the person added.
India’s EV market is small, with Tata Motors dominating sales, accounting for less than 2% of all vehicles sold in the last fiscal. But growth is fast, with the government hoping to boost EV sales to 30% of total sales by 2030.
“JSW wants to sell cars under their own brand, and for that they need technology more than investment or joint ventures with existing automakers,” said a person familiar with the matter, adding that the company has also been working with several other companies. Chinese automakers in talks.
All sources declined to be named because negotiations are still ongoing and a final decision has yet to be made.
Leap Motors declined to comment.
While JSW declined to comment, its billionaire chairman Sajjan Jindal has spoken publicly about his intentions to produce electric vehicles and discussions with MG Motor. The company made its first foray into electric vehicles in 2016.
Indian media reported this week that JSW was in technical talks with the Chinese company and was in discussions to buy Ford Motor Co.’s plant in southern India, which stopped production after pulling out of the market last year.
Details of the talks with Leapmotor have not been previously reported.
Tesla is also eyeing this market and is in talks with the Indian government to build a factory there to produce affordable electric vehicles. The government is also working on a new plan to woo electric car makers by offering them lower import taxes in return for investment in local manufacturing.
Founded in 2015, Leap Motors has less than 2 percent of China’s fragmented EV market, where it sells four mass-market EV models. In August, it unveiled a new electric vehicle platform and hopes to license it to other automakers.
One of the sources said the deal with JSW would be an opportunity for Leapmotor to generate revenue from the Indian market as Chinese companies struggle to set up manufacturing plants in India after New Delhi tightened rules on foreign investment in neighboring countries.
This also forced MG Motor India to look for local investors like JSW in order to raise equity capital.
According to media reports, Leapmotor has also held partnership talks with other major automakers, including Stellantis and Volkswagen.