Ford calls halt to making electric vehicles in India, To sell Factories & back out of PLI

Ford, the American automaker, announced on Thursday that it will no longer produce electric vehicles in India. The firm has informed the government that it will no longer invest in the country under the Performance Linked Incentive (PLI) programme.

“After careful review, we have decided to no longer pursue EV manufacturing for exports from any of the Indian plants. We remain grateful to the government for approving our proposal under the Production-Linked Incentives and for being supportive while we continued our exploration. Ford India’s previously announced business restructuring continues as planned, including exploring other alternatives for our manufacturing facilities. We continue to work closely with unions and other stakeholders to deliver an equitable and balanced plan to mitigate the impacts of restructuring,” the company said in a statement.

The PLI scheme in India selected Ford’s application. It was one of 20 automakers shortlisted by the Ministry of Heavy Industries as part of its Champion OEM programme. To encourage automakers to expand their manufacturing in India, the government is offering incentives totaling Rs 45,016 crore.

At the time, the firm stated that it was looking into the idea of producing electric cars for export at one of its Indian operations.

The Centre declared in February that the American manufacturer had qualified for its PLI (production linked incentive programme), which has as its main goal self-reliance. In the case of Ford, it was made abundantly clear that this meant manufacturing electric vehicles and components for export markets.

As part of a restructure of its India operations, the corporation said this year that it would stop manufacturing vehicles in India but keep the engine-making and technology services division (Global Business Services). Nearly 4,000 employees are projected to be affected by this change.

The decision was motivated by rising losses and a decline in India’s passenger vehicle market, which was exacerbated by the Covid-19 outbreak.

Even before it began talks with Mahindra & Mahindra in 2019, Ford was evaluating its India operations. He stated that the company opted to stop manufacturing after reviewing all options, including contract manufacturing.

After Harley Davidson, UM Motorcycle, and General Motors, it is the fourth US manufacturer to close its India operations in less than five years, citing poor sales, large operational losses, high fixed costs, and a market that has failed to meet the parent company’s expectations.