‘Small, affordable electricvehiclenot possible by 2025’
NEW DELHI: Maruti Suzuki India Ltd is committed to introducing its first locally made electric vehicle in the country by 2025, but it won’t be an affordable electric small car.
Small cars are the mainstay of the Suzuki Motor Corp. unit, but Hisashi Takeuchi, the new managing director and chief executive of India’s top carmaker, said a truly affordable small electric car is a distant prospect for the company, one that will extend beyond 2025, due to issues such as battery costs and charging infrastructure.
In an interview, Takeuchi spoke about Maruti’s EV strategy and how it plans to regain its 50% market share with new SUV launches. Edited excerpts:
What’s on your agenda as you step into your new role as managing director of Maruti Suzuki? What are the key challenges before you at present?
The most important business agenda, at present, is to secure the necessary electrical components to make our cars. So this is the single biggest challenge right now for Maruti Suzuki because we have a back order of more than 270,000 cars, which is the equivalent of almost 2.5 months’ supply to the domestic market. Without selling cars at all, we have 2.5 months of sales almost guaranteed, so it is a huge task for us to produce our monthly volumes and also cater to these backorders. We are working together with Suzuki Motor Corp.’s (SMC) head office for chip procurement. We usually only talk to our tier-one suppliers, which are our component suppliers, but now with SMC, we are opening up a direct connection to semi-conductor factories and trying to communicate what is our required volume for a much longer period of time, not just three or six months. We are asking them to take the necessary steps to increase their capacity to supply the required volume.
How much longer do you expect the semiconductor challenge to persist?
Towards the end of last year, the situation was getting better, but from this financial year, I don’t see any drastic improvement will be there. So the situation is still somehow difficult.
Suzuki has invested over 150 billion yen in an EV factory in Gujarat. How do you plan to build the EV side of your business? Will there be a separate business vertical for EVS and alternate fuels?
The Suzuki group’s investment to set up manufacturing of EVS and also battery localization clearly indicates we’re going to get into EVS and we are going to manufacture in India, which would also enable us to bring the
cost of production down. Battery costs are still very expensive, and without making an effort to reduce the battery cost, electric vehilces will still be very expensive for India.