Suzuki is likely to be the first car maker in India to make electric vehicles

Suzuki Motor Corp., the parent of India’s largest carmaker, aims to produce as many as 35,000 electric vehicles annually in India starting 2020-21(FY 2021), when it rolls out the first of these cars in the country, two people familiar with the matter said.

“Suzuki will venture into the electric vehicle market quite late compared to some of its competitors. That’s why they wanted to make sure the foray into electric should be sustainable and gradually gain volume. The battery plant was crucial and now the management has internally decided on 30,000-35,000 units per annum from FY21,” said one of the two people, requesting anonymity. A spokesperson for Maruti Suzuki declined to “give any guidance”.

While rivals such as Mahindra & Mahindra Ltd and Tata Motors Ltd are already manufacturing electric vehicles by sourcing half of the components from overseas vendors, Suzuki plans to set up the full ecosystem, starting with the lithium-ion battery plant, before unit Maruti begins selling the vehicles in India.

If all goes as planned, Suzuki is likely to be the first car maker in India to make electric vehicles with locally sourced components like lithium ion batteries.

“As of now, the target is to get approximately 2% of sales in 2021 but the infrastructure that Suzuki is creating for electric vehicles will help them hit the ground running. None of the other manufacturers as of now have any such plans,” said the first person cited above.

Suzuki will source technology from Toyota Motor Corp. and Denso Corp. for the development of a compact and ultra high-efficiency powertrain for India and other global markets. Suzuki also has a tripartite joint venture with Denso and Toshiba to set up a lithium-ion battery factory in Gujarat.

The EV market in India is still small, numbering 25,000 units at the end of 2016-17. Of this, nearly 92% were two-wheelers. Electric cars and four-wheelers accounted for less than 8% of the total sales, according to Society of Manufacturers of Electric Vehicles.

Mahindra’s plans are more ambitious. It plans to produce 60,000 electric vehicles annually starting 2020 as it seeks to benefit from its first-mover advantage. “Our electric vehicles story is poised to take off,” said Pawan Goenka, managing director, Mahindra & Mahindra Ltd, in an interview to Mint on February 6, 2018.

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