Ford rules out manufacturing electric vehicles in India even after getting approval from government

Ford has ruled out manufacturing electric vehicles at either of its plants in Chennai and Sanand. The decision comes after the American auto major applied for the Centre's Production-Linked Incentive (PLI) scheme to manufacture electric vehicles in India, and effectively marks the end of Ford's manufacturing journey in India.

Moreover, a statement from the company clearly states that the plan has been shelved despite approval from the Indian government.

“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 Production-Linked Incentives and for being supportive while we continued our exploration,” the statement reads.

“As part of the ongoing business restructuring in India, Ford has continued to explore possible alternatives for its manufacturing facilities,” said Ford in the statement, “This included applying for the production-linked incentive scheme, which allowed us to explore utilizing one of the plants as a potential EV manufacturing base.”

Ford has said that it will continue to work closely with "unions and other stakeholders” to arrive at “an equitable and balanced plan” to tide over the loss of jobs and other impacts of restructuring.

According to media reports, Ford is in talks with the likes of Kia Motors, MG Motor and Tata Motors for the sale of its two plants.

In September 2021, Ford announced the end of operations at its plants in Chennai and Sanand. The company said it was restructuring its business. Members of the Chennai Ford Employees Union union have, ever since, been protesting the company’s decision while demanding jobs in place of the ones they have lost. Ford, on the other hand, has reportedly been firm that it will only offer requisite compensation in the aftermath of its decision.

However, the Centre's subsequent decision to select Ford as one of the automobile majors to make use of PLI scheme benefits to manufacture EVs had sparked off hopes that the auto giant would in fact not cease its Indian manufacturing operations altogether.

In a letter dated May 12, 2022, Ford wrote to members of the Chennai Ford Employees Union, informing them of the decision. Earlier this year, the labour union in question had written to Ford India Private Limited with questions over whether the company intended to manufacture EVs at one of its two plants in India.

“The company was clear in its response that it did not intend to make electric vehicles either in Chennai or Gujarat,” said a member from the Chennai Ford Employees Union in possession of the letter, speaking to CNBC-TV18. “We have been asking the company if they would consider manufacturing EVs in Chennai and in turn save some of the jobs that will be lost here at the plant,” the source added, “We received our response today.”