MG Motors eyeing electric vehicles market in India; Plans to increase investment from 2022

MG Motors India Pvt Ltd is reportedly eyeing the electric vehicles market in India. From 2022, the company plans to increase its investment in the EV space expecting the economy to return to normal in a couple of years and electric vehicles to be an attention puller in the domestic automobile market in the medium to long term, said a senior executive of MG Motors.

According to the report, MG Motors will launch an affordable electric vehicle in the range of INR 12-15 lakh, which will qualify for the subsidy under the Indian government's FAME or Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles scheme. The company will also introduce the Indian automobile market to a new variant of ZS electric vehicles that will come with a 500-kilometre range.

MG Motors, one of the new entrants in the domestic market, also plans to increase its localisation of electric vehicles components and start assembling lithium-ion batteries and other critical components in India.

Rajeev Chaba, President of MG Motor India, said: “This is our mid-term to long term plan. We want to double our bets on electric vehicles in the medium to long term and want to be the leader (in the EV space). That’s why we will come with a battery with 500 kilometres range to show our intent."

Besides, China's SAIC Corp-owned company will also launch its electric sport utility vehicles in five new tier-one cities in June. All these are planned despite a border standoff between India and China and restrictions imposed by India on Chinese investments.

“Government basically has changed the procedure, and has not said no (to any investments), to which one has to apply and the application has to go through that process and may be it takes another two weeks time for approval. This is what the government has even clarified to us," Chaba said.

The Indian automobile industry is, however, expected to see a significant downfall in sales this year due to the economic downturn caused by the COVID-19 pandemic. As a result, many manufacturers are likely to delay their planned investments in different segments of the industry, including electric vehicles.

“Even in 2021 everyone is talking about 8% GDP growth because the base will go down in 2020. So, 2022 will be a good year and all these plans are lined up for then. The battery assembly will happen in our plant but whether it will be done by us or a vendor that has not been decided," added Chaba.