China’s Chery Automobile has agreed to supply technology and components to JSW Group to facilitate the launch of a new-energy vehicle brand in India by 2027, reported Bloomberg, citing people familiar with the matter.
Under the terms of the agreement, Chery is said to receive a one-time technology transfer payment fee and ongoing royalties from JSW, owned by Sajjan Jindal.
The partnership does not include any equity arrangement, adhering to India's investment restrictions on Chinese firms in strategic sectors.
This deal represents the first significant passenger vehicle technology transfer from China to India since the 2020 border conflicts, which led to heightened bilateral tensions and investment barriers.
Chery and JSW have contested the details reported by Bloomberg News, stating that the agreement primarily concerns component supply.
Chery's expertise in electric cars, hybrids, and automotive technologies like electric powertrains, hybrid systems, and intelligent cockpit technology is crucial for JSW's goal to localise and scale production swiftly.
JSW is currently assessing several Chery models, especially the iCar sport utility range, to adapt for the Indian market.
The new EV brand is said to be entirely owned by JSW and will operate separately from its current MG Motor India joint venture (JV) with China’s SAIC Motor, which will continue to sell vehicles under the MG brand in India.
The royalty payments from JSW will contribute to Chery's revenue and support its global expansion plans, which include a $1bn factory in Turkey.
The JSW is also reportedly constructing facilities in Maharashtra state in India to produce its own brand of passenger EVs from 2027 and plans to introduce electric trucks and buses as early as next year.
Furthermore, JSW aims to increase its stake in the MG Motor JV by purchasing additional SAIC’s stake in the entity, as disclosed by JSW MG Motor India director Parth Jindal in a local Indian newspaper earlier this month.
In May, Bloomberg News reported that Chery is also considering a Hong Kong initial public offering to raise around $1.5bn, citing those familiar with the matter.
Earlier this month, Chery confirmed its entry into the UK new car market this summer under its own brand.
