Ford Considering Return To India To Build EVs For Export Markets

Only six months ago, Ford shut down both vehicle manufacturing plants in India and stopped selling cars in the country.

By: Dan Mihalascu

Feb 16, 2022 at 11:33am ET

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Only six months ago, Ford shut down both vehicle manufacturing plants in India and stopped selling cars there amid a shrinking market share and $2 billion in accumulated losses.

Now, however, the US carmaker's strategy may shift dramatically as it's reportedly considering a return to India, this time as a manufacturer of electric vehicles.

The reason for this is that Ford has been granted approval to seek incentives under the Indian government's $3.5 billion Production Linked Incentives (PLI) scheme to support local production of battery electric and hydrogen fuel cell vehicles.

In a statement obtained by Autocar India, a Ford representative said the carmaker is considering producing EVs in India for export and possibly for sale in the domestic market.

"We thank the Government of India for approving Ford's proposal under the PLI scheme for the automobile sector. As Ford leads customers through the global electric vehicle revolution, we're exploring the possibility of using a plant in India as an export base for EV manufacturing."

Kapil Sharma, communications director at Ford India

When asked by Reuters if Ford may consider selling electric cars in India as well, the spokesman said "there have been no specific discussions on this right now, but it is not out of the realm of future consideration."

The cost of producing vehicles in India is lower than in western markets, and Ford has exported Indian-made vehicles to North America and Europe before. However, if Ford decides to build EVs in the south Asian country, it will need big investments to localize the supply chain, especially sourcing lithium-ion batteries.

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Ford is among 20 other companies eligible for benefits under India's PLI scheme that aims to cut oil imports and reduce pollution by giving benefits of up to 18% of new investments for manufacturing battery electric and hydrogen fuel-powered vehicles.

Ford has pledged to invest $30 billion in EVs and batteries through 2030 in what it described as a "global electric vehicle revolution."