Maruti Suzuki’s EV launch delay raises concerns over India market outlook

Following the news that Maruti Suzuki has deferred plans to launch its first electric car Wagon R EV for individual customers in India, Animesh Kumar, director of Automotive Consulting at GlobalData, a leading research and consulting company, offers his view: “The news regarding the deferment of Wagon R EV launch, coupled with the news regarding the inclusion of Hyundai Kona in government’s fleet, raises concerns regarding India’s electrification plans.

“There are several electric vehicles (EV) expected to be launched in India in the coming few years. These include Tata Nexon EV, Tata Altroz EV, Renault Kwid EV, Mahindra XUV300 Electric and eKUV100. The new launches will give more options to potential EV buyers, who currently have only Tata Tigor EV, Mahindra e-Verito and Hyundai Kona to choose from. Maruti Suzuki’s Wagon R EV was expected to be launched in 2020. However, the fact that the launch has now been deferred due to high costs and lack of charging infrastructure puts a dent to the short-term outlook for the EV market in India.

“Energy Efficiency Services Limited (EESL), an entity that procures EVs for the government, has so far bought around 1,500 vehicles comprising Tata Tigor EV and Mahindra e-Verito. However, EESL has now reportedly placed orders for the Hyundai Kona, which is a much costlier option. As per media reports, this move has been warranted due to the concerns regarding quality, performance and low mileage of the previously procured vehicles. The development may generate concerns regarding quality of future electric vehicles from domestic manufacturers.

“The government has come up with several initiatives to increase the uptake of EVs. However, most of the initiatives currently target public transportation, shared fleet ownership, two-wheelers and three-wheelers. The government recently announced revised EV charging guidelines to improve the electric charging infrastructure in large cities, state capitals, union territories and highways in the next five years.

“Maruti Suzuki’s announcement emphasizes that significant increase in the uptake of EVs will require drastic improvement in the cost of ownership and charging infrastructure. It will also require stringent policies, increase in awareness, steps to discourage purchase of internal combustion engine (ICE) vehicles, steps to encourage vehicle scrappage (with incentives for purchase of EVs) and cooperation of the automotive industry. It is extremely crucial that India develops an ecosystem that has the capability of manufacturing cost-efficient EVs, batteries and other components locally.”