With three giant deals in its kitty, Gujarat set to become an e-vehicle hub

electric car, e-vehicles, e-cars Soon after Suzuki Motor Corporation and the Jindal Group announced their upcoming lithium-ion battery (LIB) and e-vehicle projects in Gujarat respectively, sources say that a Chinese company is all set to come up with an electric two-wheeler plant in Rajkot. With a growing eco-system, the state government believes that Gujarat would soon evolve into a hub for e-vehicles in the country.

A senior official in the state government said that a Chinese automotive giant is planning to set up an electric two-wheeler plant at Rajkot. "A Chinese company is setting up an e-two wheelers plant with a production capacity of 50,000 units per year at Rajkot in collaboration with a local partner," the official said. 

Manoj Das, principal secretary of the industry and mines department of Gujarat, said players would find a ready eco-system for vehicle manufacturing in the state. "There are forward and backward linkages as well as port connectivity, apart from swift clearances that is attracting new players. Once Gujarat develops a mature ecosystem for electric vehicle manufacturing, the state would attract more players," he said. The government has, as of now, not come up with any special incentive for electric vehicle players. 

However, the state government's push to bring in investments in the automotive sector is understandable as the Gujarat government plans to increase the share of automotive industries in its overall engineering output to 10 per cent by 2020, from its current standing at 3.7 per cent. 

Meanwhile, Suzuki Motor Corporation, Japanese parent of Maruti Suzuki India Ltd (MSIL), has started work on a Rs 1,151-crore LIB manufacturing unit in the Suzuki Motor Gujarat suppliers park in Hansalpur. The project is a joint venture of SMC, Denso Corporation and Toshiba Corporation, wherein Suzuki will hold a majority stake of 50 per cent. Partners Toshiba and Denso will own stakes of 40 per cent and 10 per cent respectively. Expected to be operational from 2020, the JV plans to mount these batteries on hybrid vehicles manufactured in India and export these to the international market.

JSW Energy, part of the Sajjan Jindal-led Jindal Group, signed a memorandum of understanding (MoU) recently with the Gujarat government on Tuesday to set up a Rs 4,000-crore electric vehicle-manufacturing facility in the Surendranagar district. The plant will have the capacity to make 200,000 electric vehicles every year. 

State government sources indicated that the company has sought 500-acres of land and aims to expand production capacity to 500,000 vehicles eventually. 

An electric variant of Tata’s Nano car was also recently tested. Sanand being the hub for Nano cars’ production, in case an electric variant is launched in future, it is likely to take off from Gujarat. 

Gujarat has been consistently adding capacities with an aim to transition into an automotive hub. During 2016-17, the state roughly produced 1.1 million cars and two-wheelers, according to data sourced from the Society of Indian Automotive Manufacturers and Companies. This is a significant rise from previous year’s production level at 160,000 units, translating into a six-fold rise on a year-on-year basis. 

In FY17, Honda Motorcycle and Scooter India's (HMSI’s) Vithalapur plant produced around 945,000 units. The company is looking to manufacture 1.2 million vehicles at its Vithalapur unit in FY18. Suzuki Motor Gujarat's (SMG) Hansalpur plant is onstream now and has set a production target of 150,000 units for the current financial year. Meanwhile, the Tatas are aiming at achieving 100 per cent capacity level at its Sanand unit in FY18.

"HMSI is also in talks with us for expanding the capacity at Vithalapur by adding another production plant," said the official. 

Gujarat has been home to other electric vehicle players like Electrotherm India Ltd and Ajanta Group that marketed the Oreva brand of e-scooters. However, production remains low at these units, as dwindling sales have pushed them into the background.