South Korea’s largest electric vehicle (EV) battery manufacturer, LG Energy Solution, (LGES) is talking with Indian steelmaker JSW Group to establish a joint venture to make battery cells for locally made EVs and energy storage systems (ESS), according to local reports.

The two companies were said to have held talks earlier this month over jointly investing in a plant with initial capacity of 8GWh of batteries per year, rising to 20GWh by the end of the decade.

Mumbai based JSW is a major Indian industrial conglomerate which has expanded into new market segments in recent years, including energy, infrastructure, building materials and real estate. The company’s billionaire chairman Sajjan Jindal recently announced his ambition to enter the local EV supply chain.

JSW was understood to have also talked with other battery manufacturers to support its plans, including China’s Contemporary Amperex Technology (CATL) and Japan’s Panasonic Holdings.

The JSW/LGES meeting was said to have focused on establishing JSW’s requirements from a strategic partner although the two companies have not yet commented directly on their talks.

India overtook Japan last year to become the world’s third largest vehicle market after China and the US, with 4.8m domestic sales in 2022. It is also the world’s most populous nation with 1.4bn inhabitants and has some of the world’s most polluted cities.

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EVs still account for a small fraction of total vehicle sales but the government is now offering incentives to encourage the adoption of zero emission vehicles. There is also significant growth potential in the electrification of the country’s two wheeler segment which is the world’s largest with 16m sales last year.

LGES is a major battery supplier to Hyundai Motor Group which is also one of India’s largest vehicle manufacturers based in Chennai. The company already exports batteries to Indian motorcycle manufacturers TVS Motor and Ola Electric. It opened an office in New Delhi earlier this year to strengthen its presence and boost local growth.