Maruti Suzuki Expects Lower EV Penetration In India By 2030 Compared To Government’s Target, Says Report

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A file photo of Maruti Suzuki's logo

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Maruti Suzuki announced that the electric vehicle (EV), will be available for purchase in India by 2025. It stated that reaching the government’s 30% EV sales target by 2030 might be challenging as the company anticipates EV penetration levels between 8-10% and 2030.

GlobalData Senior Automotive Consulting Analyst Bakar Sadik Agwan comments, “Suzuki Motors is part of a global alliance with Toyota for electric vehicles, but it has been slow in implementing its BEV strategy here in India. The possibility of an India launch was sparked by the sightings of multiple Maruti Suzuki test EVs. However, the latest inputs from the CEO suggest that they believe that India is not yet ready for EV market commercialization. However, research and development for EV products is ongoing at the company. It is part of a battery joint venture in Gujarat with Toshiba and Denso and recently announced a US$1.3bn investment to local manufacturing of EVs.”

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MSI has a goal to be the leader in this segment by the end of the decade. For now, however, MSI’s main focus would be on conventional and alternative fuel ICEs.

Agwan adds: “Undoubtedly the 8-10% penetration seems more realistic considering the market challenges that include a hampered microeconomic environment in India and an increase in production costs, global semiconductors shortage and lithium shortage, as well as inadequate charging infrastructure that hampers consumer confidence in EVs that have larger battery packs.”

India announced the revised target of 30% in 2018 but has not been able to meet the EV demand. This is due to the high demand for affordable ICE cars. There are only a few BEV models on the private market after four years of decline.

Agwan concluded that Maruti Suzuki is adamantly following the ‘wait-and-see’ approach. It is evaluating the market reaction to EV products by peers, rather than investing inexpensive products. This could be compared to its compact-SUV strategy, where it launched Vitara Brezza following similar products from Ford Jeep and Hyundai in India.

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Maruti should strengthen its position in its core market and launch EV products, BEVs or hybrids, as a strategic move. Tata will be the first to enter the segment, but the dynamic EV market is constantly changing and more disruptions are possible over the next decade.

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