Over the course of the next few weeks, the alliance will begin to announce key partnerships for acquiring integrated e-drive units, which will be key to cost efficiency and production optimization for its electric vehicles, two people familiar with the developments told Mint on condition of anonymity.
Additionally, MG’s Comet EV, its small urban hatch, is also likely to benefit from the government’s productivity-linked incentive scheme due to its increased focus on localization and an Indian pedigree, these people said.
The ministry of heavy industries may again look to review MG Motor India’s application to the PLI scheme for the auto sector. The ministry had left its review of the company’s application ‘pending’, and had not rejected it, leaving the door open for a later review.
“Work is happening in this direction (of localization) already. In EVs, apart from getting cell technology, there is a focus on localizing the e-drive,” said one of the people mentioned above.
“There are a clutch of critical components in an EV, including a connector, an on-board charger, motor, inverter, transmission, diffuser, etc. Companies in China are using 3 units-in-one or 5 units-in-one combos, going up to 7-in-one combos. By doing this, you make the e-drive compact, very productive, and efficient. China is becoming the leader in this technology,” this person said, indicating that the JSW-MG Motor JV was looking to have similar technology manufactured in India.
“Localization requires a big investment but because of JSW and the alliance’s more robust future, the MG Motor-JSW JV is now talking to about half a dozen Indian automotive suppliers to localize the e-drive for the company. MG will choose a three-in-one or five-in-one technology for India,” this person said.
MG Motor India did not respond to Mint’s queries, while JSW said it did not have a specific comment to offer for this article.
Improving efficiencies
MG Motor India now has stability in its business, stability in policy, and an assurance of volumes, which can help it negotiate favourable terms with ecosystem partners, one of the e-powertrain suppliers the company is engaging with told Mint.
By combining multiple elements of an EV drive system into a single assembly, manufacturers can reduce the complexity of the vehicle’s design, lower manufacturing costs, improve reliability, and increase the vehicle’s performance efficiency. This modular approach is becoming more popular as technology in the EV sector advances, allowing for more efficient production processes.
While global leaders like Tesla and BYD have pioneered the use of these integrated assemblies, the technology is already being adapted by Indian manufacturers.
French automotive company Valeo, for example, will provide a three-in-one power electronics combo to Mahindra and Mahindra Ltd for its range of born-electric sports utility vehicles, in a total order value of $1 billion.
Bosch is another global tier-1 supplier making compact integrated modules for EVs.
Rapid progress
“The JSW-MG Motor India JV was formalized into the new entity only by the end of March, but over the last 2-3 months it has already made good progress on its cost and localization intent,” said another person familiar with the developments.
MG Motors India on Wednesday said its retail sales declined by a marginal 1.45% to 4,485 units last month, from 4,551 units in April 2023. Its dealers are now looking forward to a new product plan as EV sales slow down and the MG Hector remains the volume-driver for the company.
In March, MG Motors India had said it would introduce a ‘new energy’ vehicle every three to four months beginning September, rolling out top-end “cars that India has not seen”.
The JV partners have agreed to invest $750 million (about ₹5,000 crore) to produce 300,000 units a year, make more parts locally, and bring in technology for new products.