As it moves ahead with plans to produce electric vehicles locally, the Indian steel-to-energy business JSW is in preliminary discussions with Korea’s LG Energy Solution (LGES) about jointly manufacturing batteries in India, two people told Reuters.

One of the sources with firsthand knowledge of the conversations claimed that JSW met with senior LGES officials in Korea earlier this month and proposed a collaboration to produce battery cells for EVs and energy storage in India.

Both LGES and JSW declined to comment on any conversations.

According to the second individual who is knowledgeable with JSW’s EV intentions, the Indian company is also in talks with other battery players, including China’s CATL and Japan’s Panasonic and Toshiba, as it attempts to establish a local supply chain for EVs.

“Due diligence wise JSW is talking to a lot of people because it needs an ecosystem for an EV. It is looking at storage, motors, battery management,” the person added.

According to the first source, LGES, which provides battery cells to major automakers including Tesla and General Motors, has requested information from JSW regarding its specifications for EVs and energy storage.

The company hopes to set up a plant to create 20 gigawatt hours (Gwh) of battery capacity in phases by the end of this decade, starting with 8 Gwh in the first phase, according to a third source briefed on JSW’s EV ambitions.

The billionaire chairman of JSW, Sajjan Jindal, has publicly expressed his intention to produce electric vehicles and JSW’s discussions to acquire a stake in MG Motor of China.

According to sources last month, talks with MG Motor have been put on hold, while JSW is in talks to licence technology to construct electric vehicles in India under its own brand with Chinese automaker Leapmotor.

Panasonic chose not to respond. Toshiba claimed that “at this point” it is unable to clarify whether it is in discussions with JSW for a joint venture to produce battery cells. An inquiry for comments from CATL was not answered.

Due to the fact that the discussions are still ongoing and no decision has been taken, all three sources declined to be named.

The electric vehicle (EV) market in India is still tiny but expanding, with Tata Motors dominating sales.

Last year, less than 2% of all vehicles sold were electric versions, but Prime Minister Narendra Modi’s administration hopes to increase that number to 30% by 2030.

It is working on a new strategy for EVs that offers lower import tax in exchange for investment in local manufacture and is providing companies with billions of dollars in incentives to create batteries and other EV components locally.

Tesla is in discussions with the government to develop EVs and batteries in India, which is another market it is eyeing.

According to a government document, JSW is in talks with LGES as it seeks to expand its footprint in the third-largest auto market in the world, where it launched an office in New Delhi earlier this year to expand its automotive, mobility, and energy storage businesses.

One of the insiders also mentioned that LGES is in talks with further businesses. Ola Electric, which is sponsored by the SoftBank group, and TVS Motor, a domestic rival, are the top two manufacturers of electric scooters in India.

(Adapted from Reuters.com)