Ford has withdrawn its application from the Centre’s production-linked incentive (PLI) scheme for export of electric vehicles.
Consequently, the company will not use any of its existing facilities in India for this purpose. Speculation was rife that the Maraimalainagar plant near Chennai would be the right for EV manufacturing since reports have been doing the rounds that the other unit at Sanand, Gujarat, will be sold to Tata Motors.
With Ford now shelving its PLI plans, it remains to be seen what is in store at Maraimalainagar where production of vehicles will come to a halt in the coming weeks. Names of potential suitors like Hyundai and Ola have been doing the rounds for some months now but nothing concrete has emerged yet.
From the Ford employees’ point of view, this will be a big setback since they would have been hoping for a new lease of life with electric production. The Tamil Nadu government will be as concerned and will have to do its bit in scouting for a buyer.
After all, this can be a tricky situation with the manpower of 2,400-odd at Maraimalainagar wondering if they will be jobless once vehicle production ceases at the plant. It is not the easiest of situations handling anger and anxiety and this when the state government will have to tread carefully.
Talks have apparently been on with other automakers but observers believe the best fit will be Hyundai which has big plans for India. The Korean carmaker has a plant in Sriperumbudur which is not too far from the Ford facility near Chennai. This is a vibrant auto hub with a host of other brands like Renault-Nissan, Daimler India Commercial Vehicles, Royal Enfield, Yamaha etc.
It is also a mystery why Ford chose to drop India for its EV plans and the answer perhaps can be traced to the present state of geopolitical tensions across the world. The war in Ukraine and the lockdown in China have led to a massive increase in input costs for EVs and Ford perhaps did not think it appropriate at this point in time to contemplate new investments in electric.
Sources also say that capacity at Maraimalainagar for EVs could also have been a challenge from a long term point of view for production worldwide. Ford is betting big on this business and would have ideally needed more capacity to make this a reality.
By the end of the day, it is now clear that Ford has wrapped up its India innings and there is no question of restarting operations. The EV foray kindled hopes but with the shelving of the PLI scheme, the company will join a growing list of automakers that have exited India. The biggest casualty each time this happens is the workforce as evident with Peugeot and Daewoo two decades earlier followed more recently by General Motors and Harley-Davidson.
Ford will have to weigh all options for electric facility in India