WILL SAJJAN JINDAL'S EV GAMBLE PAY OFF?

JSW Group has finally entered the auto sector through its tie-up with China's SAIC. But the road ahead will be rough

- Sumant Banerji

• The domestic passenger vehicle industry is notorious for its hostility to newcomers. Of the 16 players in the industry, the top six account for over 90% of the sales.

JSW Group chairman Sajjan Jindal has always dreamt of making a car. Nevertheless, in August 2017, when the group announced its intention to enter the electric passenger vehicle market, it took everybody by surprise. The electric vehicle (EV) segment was at a very nascent stage at that time and none of the mass market carmakers had anything worthwhile to offer. But Jindal was dreaming big.

Under the aegis of JSW Energy, he earmarked an investment of up to $624 million to realize his automotive ambitions, with the aim of launching the company’s first vehicle by 2020. JSW even signed memoranda of understanding (MoUs) with Maharashtra and Gujarat for manufacturing units.

However, given that the group had no prior experience in automotive manufacturing, shareholders felt this was too big a leap into the unknown, and into an industry that was still evolving. Jindal decided to back off and, within two years, the plans were shelved.

"Given the 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," JSW Energy had said in a notification to stock exchanges on 29 March 2019.

But the engineer in Jindal—he has a degree in mechanical engineering from Ramaiah Institute of Technology in Bengaluru—had not given up on his dream to make a car. On top of that, the businessman in him had identified a blind spot in the automotive industry to exploit.