The JSW Group and Chinese SAIC Motor are negotiating the next round of financial support for JSW MG Motor India. The automaker plans to expand production capacity beyond the planned annual output of 220,000 units at its Halol plant and increase its portfolio of new energy vehicles (NEVs).
The company is investing approximately INR 3,500 crore in facility modernization, production localization, and new product development. Ultimately, the company aims to increase the annual capacity of the Halol plant to around 400,000 vehicles. Partner Jindal, Managing Director of the JSW Group, stated on Wednesday that JSW MG's ambitions include scaling up to one million vehicles.
Jindal emphasized that the current capacity of 220,000 units is insufficient given the market response to MG. He noted that achieving targets of 400,000 and beyond one million vehicles will require capital infusion.
Currently, JSW holds a 35% stake in JSW MG Motor India, while SAIC holds 49%. The remaining equity is held by Indian financial institutions, dealers, and employees.
The existing investment program of about INR 3,500 crore is being financed through a combination of debt and equity, including funds remaining from JSW's initial investments in MG. However, any expansion beyond the approved program will require shareholder approval for the next funding stage.
Jindal reported that discussions between both shareholders are actively underway but declined to comment on whether the negotiations would lead to a change in their ownership stakes. He added that the recent easing of restrictions under Note 3 could open new opportunities for SAIC to invest in the Indian venture. Both shareholders remain interested in supporting the business.
According to Note 3, investments in Indian companies from entities based in countries bordering India, including China, require prior government approval. SAIC views India as its next major growth market amid the maturity of markets in China and Europe, and the partnership with JSW provides a critical advantage in localizing operations and penetrating the Indian market.
The expansion comes against the backdrop of MG's plans to significantly increase sales volumes. Jindal expects the company to exceed 95,000 vehicles and reach 100,000 units by Calendar Year 2026 (CY26), compared to approximately 70,500 vehicles in CY25. He stated the goal of continuing to increase sales volumes by 35–40%, noting that increasing localization levels will also be crucial for improving profitability.
The current capacity of the Halol plant is about 110,000 units per year. Jindal clarified that this capacity will rise to 160,000 units by March 2027 and to 220,000 units by January 2028. The company has completed master planning, which will allow the same facility to produce around 400,000 vehicles annually in the future.
According to Jindal, there is no immediate need for a new manufacturing facility in the next three to four years. A decision to build an additional plant may be considered when volumes exceed approximately 250,000 units.
MG is already operating the Halol plant in three shifts to increase production. Production increased from approximately 8,000 vehicles per month a few months ago to 9,000 last month, with the company targeting 9,500 this month before gradually moving to a production of 10,000–12,000 units per month.
Total investments for the expansion amount to approximately INR 6,000 crore, comprising INR 3,500 crore in company equity and about INR 2,500 crore in investments from its suppliers. Localization will be a key element of this expansion; by the end of CY27, the company aims for a localization level of about 70% for both the Windsor model and the new Hector Tomahawk. However, battery cells, rare earth magnets, and some electronic components cannot yet be sourced locally in the required volume.
MG's next phase of growth will also rely on ADAPT—a modular architecture for multi-vehicle platforms with an advanced drivetrain. This platform supports Battery Electric Vehicles (BEV), Hybrid Electric Vehicles (HEV), Plug-in Hybrid Electric Vehicles (PHEV), and Extended Range Electric Vehicles (EREV).
Anarag Mehrotra, Managing Director of JSW MG Motor India, noted that the strategy involving multiple powertrain types is aimed at meeting diverse consumer needs, especially those buyers who want the fuel efficiency benefits of EVs but also undertake longer journeys. MG plans to use ADAPT for BEV and PHEV, and is evaluating EREV. In an EREV, the wheels are driven only by the electric motor, and a smaller internal combustion engine (ICE) serves as a generator to recharge the battery, reducing range anxiety.
Jindal also proposed differentiated taxation for these new energy technologies. While pure EVs are taxed at a Goods and Services Tax (GST) of 5%, PHEVs are taxed at 18% or 40% depending on the vehicle size and engine characteristics. He observed that the government's approach distinguishes between vehicles where the engine can directly drive the wheels and EREVs, where it only generates electricity. Jindal believes that tax reductions could accelerate the adoption of PHEVs and EREVs, although he acknowledges they do not necessarily have to receive the same 5% rate as pure EVs. He concluded: 'Then don't make it 5 percent, make it 18 percent, no problem... But the consumer must get it cheaper.'
Although MG will continue to sell ICE vehicles, NEVs will remain central to the company's growth strategy. Mehrotra previously stated that he expects NEVs to account for about 70–80% of sales, which necessitates the use of multiple powertrains to expand the accessible market.