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Ford Cancels Plan To Make Electric Cars In India – To Sell Both Plants

Ford India drops plan to make electric vehicles here as part of the Champion OEM Incentive scheme, part of PLI scheme

New Ford Electric SUV
Image for reference.

Ford India has been gulping down the humble pie for a while now. In 2019, the auto manufacturer announced an agreement with Mahindra to work on a JV. Less than 2 years later, the collaboration ended. The outline focused on cost effective vehicle development and production for emerging markets.

While initial outlook pointed to Ford continuing with its own production plans in smaller UV segments, the manufacturer finally chose to exit manufacturing in September 2021. Ford was again back in focus having made it to the list of 20 carmakers that were part of the Champion OEM Incentive scheme, part of the PLI scheme. The announcement was made in February 2022. Plans pointed to EV manufacturing.

Ford Does Not Want To Invest Any Further In India

Despite approval of its Production Linked Incentive (PLI) application, this plan has now been dropped. Ford’s decision is to not advance its EV manufacturing plans in India. While the auto manufacturer expresses gratitude for having its proposal approved, this option is now not being explored. The application won’t see the light of day as Ford isn’t investing in India.

The Champion OEM Incentive Scheme has a budgetary outlay of about 26k crore. In the meantime, Ford has been partaking in dialogue with other Indian manufacturers regarding its 2 plants here. This is part of the initial plan wherein both plants are sold. Gujarat plant is all set to be sold to Tata Motors, claims unconfirmed reports.

Ford Mustang Electric
Ford Mustang Electric

Indian car manufacturers

Current business undertones point to a shift to EVs. The goals set point to substantial transition by the end of the decade for electric two-wheelers, CVc, and passenger cars. To this end, Central and select State governments have announced specified incentives. While there has been much activity in the electric two-wheeler front, it’s not the same for cars.

A large number of new manufacturers have either already entered the 2W segment or have announced their intent to do so. However, where passenger car manufacturing is concerned, the market has over time lost multiple manufacturers. Datsun being the most recent manufacturer to choose an exit. Prior to Ford, General Motors exited production for India. Somewhere along the way, Fiat stopped making cars here. In comparison, 3 new entrants have been working their way up – MG Motor India, Kia, and Citroen.

Shift to electric cars

For now, the electric car market in India is small. This is wholly dominated by Tata Motors currently. Other manufacturers who are selling at least 1 electric car in India, do so in price tag variation that at best is a high price point. It would be interesting to see if India’s focused development of electric cars focuses on keeping things simple. The need of the hour is mass market EVs that are affordable. The world however has advanced manifolds and manufacturers are able to make available luxury electric cars.

This makes sense because buying predictions are based on whether a buyer can afford the car. And, a luxury electric car always stands a chance because its buyers can afford the price tag. So, while a Tesla is everything one can want, this pricey proposition isn’t going to benefit buyers. For the market to grow, it’s an open playfield for manufacturers like Maruti, Hyundai and Honda to introduce budget EV cars.


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