Maruti Suzuki expects lower EV penetration in India by 2030 compared to government’s target, finds GlobalData

Maruti Suzuki has announced that its electric vehicle (EV) will be available in India for sale by 2025. It also iterated that the government’s target of 30% EV sales by 2030 may be difficult to achieve as the company expects EV penetration level between 8-10% by 2030 that looks realistically more possible, forecasts GlobalData, a leading data and analytics company.

Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, comments: “Suzuki Motors has a global EV alliance with Toyota, however it has lags with regards to its BEV strategy in India. Spotting of multiple Maruti Suzuki test EVs sparked speculation about an India launch but the recent inputs from the new CEO suggests that the company believes that the market is isn’t yet ready for EV commercialization. That said, the company has research & development ongoing for EV products. It has a battery joint venture with Toshiba and Denso in Gujarat and has recently announced a US$1.3bn investment for local manufacturing of EVs and EV batteries.”

However, MSI does have an ambition to achieve leadership in the segment in the second half of the decade. But for now, the larger focus for the company would be conventional and alternative fuel ICEs.

Agwan continues: “Undoubtedly, the expected 8-10% penetration looks more realistic given the market challenges that include a hampered macroeconomic environment in India, an increase in the cost of production, global semiconductors and lithium shortage, and inadequate charging infrastructure that hinders consumer confidence in EVs with larger battery packs.”

Since announcing the revised target of 30% back in 2018, India has renewed efforts to boost the whole EV ecosystem, but the EV demand and supply remained limited given the strong market for affordable ICE vehicles. Four years already down and just a handful of BEV models are available on the market for private users.” 

Agwan concludes: “Maruti Suzuki is patently adopting the ‘wait and see’ approach – it is assessing the market response to EV products from peers rather than making heavy upfront investments in products. This could be compared with its compact-SUV strategy where it launched its Vitara Brezza after similar products from Ford, Jeep and Hyundai proved successful in the Indian market.

“For now, it makes absolute strategic sense for Maruti to reinforce its position in its core area and mindfully launch EV products - BEVs or Hybrids later. No doubt, Tata will have a first-mover advantage in the segment but the dynamic EV market does not stand still and many more disruptions can be expected over the next decade.”