Maruti Suzuki believes mass market electric cars not viable for Indian market.
The world is moving towards an electric vehicle future. Some countries already have a huge market share of EVs. India is preparing for it but still it seems there is a long way to go. The largest carmaker in the country, Maruti Suzuki is not ready for it yet.
The carmaker believes high costs deter buyers. The Indian market is dominated by small affordable cars. A small petrol car is priced around Rs. 5 lakhs. For business viability and volumes, a small electric car should be priced at Rs. 7-8 lakhs.
That kind of price point for an electric car isn’t possible right now. The battery technology currently is quite expensive as lithium ion battery forms 50 percent of the cost of an electric car. With this rate, it will shoot up the price of a small EV upwards of Rs. 10 lakhs.
Cars that are priced over Rs. 8 lakhs account to only 20 percent of sales in India. Hence, Maruti Suzuki calculates that there will be little sales for EVs in India with such battery tech in the current scenario.
They believe customers won’t pay price of a premium car to get a small car. They are coming up with an electric version of the Wagon R but that’s only for the aggregator market with annual production of 5000 units and price upwards of Rs. 10 lakhs.
Maruti Suzuki chairman R C Bhargava believes that when the battery costs reduce to 25 percent cost of a small electric car, the business will be viable and that’s when Maruti plans to roll out mass market electric cars.
Right now the battery tech does not meet expectations of a customer on charging time and affordability. R C Bhargava expects there is still 5 to 8 years before breakthrough like solid-state lithium batteries. He also believes the current charging infrastructure is a huge obstacle for EVs.
Also, the batteries have to be manufactures in India and not imported to meet the viable costs. Currently Maruti Suzuki has formed a joint venture with Toshiba and Denso to manufacture lithium ion batteries in India but it’s only for hybrid cars and limited units of 20,000 annually.
Maruti Suzuki Electric Car
– No Maruti electric car launch anytime soon
– Waiting for battery tech, charging infra and financing to improve
– Battery cost should reduce to 25% of electric car for viable business
Source – Business-Standard.com