Why Maruti Suzuki Is Late To The EV Party

This was made clear in the company's most recent annual report, which said that India's largest automaker does not expect a quick switch to battery electric vehicles (BEVs) in the near future, even though there is an immediate need to cut emissions and reduce the carbon footprint. Maruti Suzuki will be late to the EV business, with most of its competitors having a range of EVs on the market between 2021 and 2025.

Why Maruti Suzuki is late to the EV party?

In the company's annual report, Maruti Suzuki's Chairman, RC Bhargava, stated that while automakers around the world are making "ambitious" plans to switch from internal combustion engines to BEVs, Maruti Suzuki's electrification strategy must be "consistent with the country's economic and infrastructure conditions."

Bhargava talks about what is stopping people from buying BEVs. He says that the main issues are low incomes, the high cost of BEVs right now, and the lack of charging infrastructure in the country.

The average income per person in India is about $2,000, which is about 5% of what it is in Europe and Japan. This makes it more difficult for many people to afford expensive cars. Because of the current technology, electric cars are much more expensive than regular cars. According to Bhargava, this, along with the lack of charging stations, makes it very difficult to sell electric cars to people who can only afford modest cars.

Bhargava also points out that only 5% of passenger vehicle sales in India are for cars that cost more than Rs 15 lakh, therefore, only a small number of people will buy electric cars.

Factors cited by the RC Bhargava for being slow to the EV market:

There are various factors cited by the chairman of Maruti Suzuki to avoid the EV market in the short term:-

1. Weather conditions: The weather conditions are electric vehicles are not ideal due to the hot weather. The CEO wants the EVs to be perfectly safe before venturing aggressively into the segment.
2. Higher cost of EV vehicles: Due to the higher cost of EV batteries, the market for EVs is expected to be lesser as compared to the advanced economies.
3. Only 10% market share by 2030: According to Hisashi Takeuchi, CEO of Maruti Suzuki, the market share of EV vehicles will be too less as compared to developed economies.
4. Manufacturing of batteries in India: Batteries will have to be manufactured in India rather than imported, in order to reach realistic numbers in EV manufacturing.

Thus, according to the company, they might be late to the EV party, but the decision is intentional. With the sales garnered by the company over the years, and the understanding of the Indian consumers, it will be interesting to see if the company is on the correct path or if they are missing the bigger party.