JSW kills its electric vehicle plan citing higher uncertainties

Sajjan Jindal-led JSW Energy in August 2017 announced a strategic diversification plan to mark its debut in the electric vehicle business, has now killed its ambitious project owing to high uncertainties associated with the business as well as to maintain capital for growth opportunities in the power sector.

JSW had signed pacts with Maharashtra and Gujarat government earmarking investment of around Rs 4,000 crore for manufacturing EVs, energy storage systems and associate business.

Calling the move as ‘prudent risk management’ the board announced that while “JSW Group and JSW Energy have always embarked on new business opportunities keeping a balance between growth aspirations and prudent risk management. In this context, given higher than anticipated uncertainties associated with the EV business, the board has, after careful evaluation, decided not to pursue this business and maintain capital cushion for growth opportunities in power and other related businesses.”

This announcement from the company comes barely few days after the Government released the second phase of FAME II policy that ended subsidy for private buyers of electric four-wheelers. According to Industry experts this has acted as a catalyst for the company’s decision to kill the plan. Now Now if JSW has dropped its plans to enter the segment citing uncertainties, then there is a possibility that other potential companies see a similar threat around the segment, its time that the government interact with the Industry veterans and understand the concerns of the automotive industry.

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