Sona BLW forms JV with Japan's DENSO Corporation for electric, hybrid powertrain systems

In a regulatory filing, the company said that in this joint venture, DENSO will hold a 51% equity stake and assume management control, while Sona Comstar will hold the remaining 49% and contribute its engineering capabilities, manufacturing expertise and established supply chain ecosystem.

Both the companies have entered into a Joint Development Agreement (JDA) to develop high-efficiency liquid-cooled traction inverters, traction motors and generators for electric and hybrid passenger vehicles, commercial vehicles and other high-voltage applications. To commercialise these products, the partners will establish a joint venture to manufacture them in India, Sona BLW said in a filing.

“This partnership marks an historic milestone in Sona Comstar’s journey as a mobility technology company and reflects the capabilities we have built across advanced electric powertrain systems over the years. This will also accelerate the growth of our existing electric powertrain business for two- and three-wheelers by strengthening our capabilities across the powertrain value chain and enabling us to serve a broader set of customers,” said Vivek Vikram Singh, MD and Group CEO of Sona Comstar.

By combining DENSO's technology leadership in electrification, advanced product engineering and R&D capabilities with Sona Comstar’s proven engineering excellence, cost-competitive manufacturing, agile delivery and deep understanding of the Indian automotive ecosystem, the partners aim to build scalable and cost-efficient powertrain solutions.

Details of the two joint ventures

Furthermore, the partnership will be implemented through two strategic joint ventures. One joint venture will focus on high-voltage liquid-cooled traction inverters, traction motors and generators for electric and hybrid four-wheelers and larger vehicle applications.

The other joint venture will focus on air-cooled traction inverters, traction motors and generators, and e-Axles for electric and hybrid two-wheelers and three-wheelers.

Both parties will set up another joint venture, under which Sona Comstar will transfer its existing electric traction motor and controller business for two- and three-wheelers to its wholly owned subsidiary through a slump sale.

Following this transfer, DENSO, directly or through its affiliates, will acquire a 49% stake in the entity at an enterprise value of ₹1,750 crore, while Sona Comstar will retain the remaining 51% stake and management control.

The joint venture will operate in the business of air-cooled traction inverters, traction motors and generators, and e-axles for electric and hybrid two- and three-wheelers. It will focus on these product segments as part of its core operations.

Both DENSO and Sona Comstar will license intellectual property and know-how to their respective majority-owned joint ventures in return for royalty payments.

“Through this partnership, we will bring together the respective strengths that both companies have built over the years to provide electrification solutions that address the diverse needs of customers in India. By harnessing new competitive strengths created through synergies across the two companies’ products, technologies and business foundations, DENSO will further advance and accelerate its electrification business,” said Tsuneo Maebara, Head of Powertrain Systems Business Group at DENSO Corporation.

On Wednesday, Sona BLW shares closed at ₹726.50 apiece on the National Stock Exchange, falling 0.85%. The development, however, came after the market hours.