15-20% EV sales of JSW MG Motor come from BaaS: Parth Jindal

Battery-as-a-service (BaaS) model accounts for around 15-20% of total electric vehicle sales of JSW MG Motor India, according to the company’s director Parth Jindal.

The BaaS model, which brings down high upfront cost of EVs by offering battery rental, was first launched with the MG Windsor. It was later extended to JSW MG Motor's other EVs—Comet and ZS.

Jindal says BaaS sales are expected to increase as the company on-boards big lenders. The carmaker started its BaaS offering by partnering with non-bank lenders initially.

“The big banks from where most people take loans were still figuring out and understanding this concept because this is the first time in India. Now major banks have started accepting BaaS. Kotak Mahindra Bank has come on board. We expect ICICI Bank, HDFC Bank IDFC and State Bank of India to also come on board. We expect the numbers to increase now,” Jindal tells Fortune India.

Jindal, however, says at some stage, the Indian consumer still wants to own the whole thing. “But because of BaaS, they have understood you cannot compare a ₹13 lakh ICE car with an EV which has lower running costs,” he says.

On MG Windsor becoming India’s top-selling EV, Jindal says, “When we added the disruption of BaaS where we separated the body and the battery, we were able to bring the upfront cost of the EV down. The initial cost of buying an EV is high. We separated the two and explained to people that you pay the rental for the battery. A lot of people who were looking to buy ₹10 lakh ICE suddenly said I can get the Windsor for the same price and that really has caused this huge demand.”

JSW MG has also narrowed the market share gap with India’s largest electric carmaker, Tata Motors. “We had a 48% market share in EVs in the month of December,” says Jindal.

“We have a big backlog of orders. We are ramping up our production in Halol (Gujarat) to meet the demand. We are seeing very good traction. This makes us very confident in our strategy,” he says.

Jindal says the onus is on the auto sector to push the envelope and to electrify India’s car market. “We have to bring new ways of selling like BaaS. EV penetration is low not because people don’t want EVs. People want EVs but at the right price,” he says.

When asked about profitability of EVs, Jindal says the company's electric vehicle business is expected to become profitable this month.

Jindal says while the focus is on EVs, ICE will continue. “The market will continue to demand ICE vehicles as well. We want to be at the forefront of NEVs. That doesn’t mean we will ignore ICE. We will continue to bring new ICE products. MG has plug-in hybrid technology as well,” he says, adding that JSW MG Motor’s dream is to facilitate first-time car buyers to buy an EV.

There is a huge opportunity in the automotive space, believes Jindal. “Not enough is done on new energy vehicles. So whether it is on buses, trucks and cars, JSW has its own ambitions as well to get into that space.”

The SAIC Motor-backed carmaker has commenced work on another manufacturing facility in Aurangabad.

“We have just scratched the surface. The JV (joint venture with China’s SAIC) is a powerful one. There is a huge opportunity in India. Today we are a marginal player in passenger vehicles. We have 1.5% market share. If you follow JSW, we are not going to ever be satisfied unless we are in the Top 3 in any industry that we are in. Our vision is to come in that top 3 while becoming number 1 in new energy vehicles,” says Jindal.

“We had outlined that we want to take this business public and do an IPO three to four years from the time of entry. We stand committed to that plan. We want to scale this business and the dream is to sell 1 million cars from in India,” Jindal adds.