Ford has dropped its EV manufacturing plan for India

Can’t decide on one thing.
Can’t decide on one thing.
Image: REUTERS/Wolfgang Rattay/File Photo
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US auto major Ford has made a U-turn on its electric vehicle (EVs) plan for India.

After exiting the Indian market in September 2021, it had made a surprise re-entry, being selected for prime minister Narendra Modi’s special incentives programme to manufacture EVs.

Yesterday (May 12), however, came the announcement that it will “no longer pursue EV manufacturing for exports from any of the Indian plants.”

“We remain grateful to the government for approving our proposal under the Production-Linked Incentives and for being supportive while we continued our exploration,” a Ford spokesperson told Reuters.

Amid growing uncertainty around Tesla’s India debut, Ford’s decision may come as a setback to the country’s nascent EV industry. All the more so after recent incidents of fire accidents involving electric two-wheelers have made potential customers in the country jittery about the segment.

Why did Ford decide to drop its EV plans?

Earlier, while leaving India, Ford has said it will restructure its India operations. Applying for the government’s incentive scheme was a part of the revamp “…which allowed us to explore utilising one of the plants as a potential EV manufacturing base,” Ford’s spokesperson said.

“Ford India’s previously announced business restructuring continues as planned, including exploring other alternatives for our manufacturing facilities. We continue to work closely with unions and other stakeholders to deliver an equitable and balanced plan to mitigate the impacts of restructuring,” the spokesperson added.

The company now plans to resume compensation talks with its shocked workers.

Ford’s India unit has two plants in the country—one in Gujarat’s Sanand and the other one in Chennai, Tamil Nadu. The company is reportedly selling them both.

Tata Motors is eyeing the Sanand plant, while several companies, including Softbank-backed Ola, are in talks with Ford for Chennai, according to Reuters.