Leading carmaker Maruti Suzuki would not be producing electric cars in recent years, according to chairman RC Bhargava. Expecting the demand to reach a profitable position, he added that EV production would only be commenced after 2025.
Bhargava was addressing a virtual conference on the company’s second-quarter earnings. He said under the current circumstances a lot of things in the EV ecosystem such as batteries, charging infrastructure and electric supply are done by other parties and therefore the costing is not in the hands of the company. Stating that launching an EV would depend on market conditions, Bhargava said at present it is difficult to predict the pricing of electric vehicles and how the infrastructure is built up.
He added that selling a few thousand units is not what the company is envisioning. Unless and until the market space does not allow the carmaker to sell more than 10,000 units a year, stepping into the EV field would not be an option.
“Unfortunately, we will not feel happy if we can (sell) 300 or 400 or 500 or even 1,000 cars (a month). For some reason we have gone too much higher volumes, and volumes in 100s and even 1,000s, are very good, but they leave us a little unexcited…So we have to see if I start selling EVs I would like to sell maybe 10,000 EVs in a month or something like that,” Bhargava said.
The company had earlier in 2019 tested an electric vehicle based on its WagonR with plans to launch in 2020 but decided against a commercial launch for personal usage citing lack of infrastructure and government support.
Asked if the government’s production linked incentives (PLI) for EVs would encourage Maruti Suzuki to accelerate its EV plans, Bhargava said, “In any case our programme of launching an electric vehicle is not going to change because of the PLI scheme. I think a launch date or when you expect to launch the vehicle is something to be decided basically by Suzuki in Japan.”
Tata Motors has been receiving a warm response to its stint of EV production, especially for cars like the Tata Nexon and the Tata Tigor EV. On being questioned about why Maruti Suzuki couldn’t follow a similar pursuit he replied, “If I’m selling 2 million cars a year, which I think it will be when things normalise, does it make sense to sell a car less than 1,00,000 a year out of 2 million?”
“I have to have a car which is more saleable, there has to be greater demand for the product. All Maruti products launched have had very significant demand,” Bhargava asserted.
He, however, said the company has not given up on plans to enter electric mobility in India but the timeline would be decided by its parent Suzuki Motor Corporation.
Asked when could Maruti Suzuki launch its EV, he said, “If I have to give you an outside date it would be post 2025.”
To a query on the rising petrol prices and their impact on demand for CNG vehicles, he said out of over 2 lakh current pending orders, the majority are for CNG models, and Maruti Suzuki India is intensifying its focus on more CNG offerings of its models.
Maruti Suzuki India Managing Director and CEO Kenichi Ayukawa said in order to meet the demand for CNG vehicles, the company will increase production for such vehicles while it is also working on plans to offer CNG options in more models in the next few years.