Ford will not make EVs in India; withdraws PLI application
What's the story
Ford has scrapped its plans to manufacture EVs in India for the global markets. Geopolitical tensions and a difficult business case might have influenced this decision. The US carmaker, which was one of the first to get approval for the Centre's production-linked incentive scheme, has withdrawn its application. The fate of its factories at Sanand, Gujarat and Maraimalai Nagar, Tamil Nadu is now uncertain.
Context
Why does this story matter?
It is now clear that Ford has wrapped up its manufacturing operations in India and will only import cars as completely built units. This is also a big blow to employees, and the Centre as well as the states will have to handle the issue of joblessness carefully. Ford joins a growing list of automakers that have exited India, including General Motors and Harley-Davidson.
Intent
What was the company's original plan?
Six months after ending production in India, Ford announced that it was "exploring the possibility of using a plant in India as an export base for EV manufacturing," under the PLI scheme. As part of the scheme, automakers get incentives for the manufacturing of EVs and hydrogen fuel cell EVs (FCEVs) here. Maruti Suzuki, Hyundai, and Tata Motors are some of the other beneficiaries.
Official words
Grateful to the Centre for its support: Ford
Ford has put out a statement confirming its future plans regarding the business restructuring in India. "After careful review, we have decided to no longer pursue EV manufacturing for exports from any Indian plants," the company said. "We remain grateful to the government for approving our proposal under the production-linked incentives and being supportive while we continued our exploration."
Possibility
Why did the brand scrap its plans?
The EV business is a gamble for Ford and it requires factories with huge production capacities to fulfill its dreams. The Tamil Nadu plant might not be able to meet production demands in the long term. Input costs for EVs have also gone up significantly due to the Ukraine war and lockdowns in China. Thus the company might be wary of making new investments.
Information
Ford's Sanand factory might be bought by Tata Motors
Thousands of people are staring at job losses if Ford does not sell its factories to other automakers. However, speculations are rife that its Gujarat plant will be sold to Tata Motors, while brands like Hyundai are in the fray for its Tamil Nadu factory.