Suzuki, Denso, Toshiba’s lithium-ion JV unit to go on stream by year-end
Suzuki Motor Corp, Denso Corp, and Toshiba are set to start commercial production of the lithiumion cell at their joint venture (JV) unit in Gujarat by December, said a person aware of the plans.
The development brings Suzuki’s India subsidiary, Maruti Suzuki, closer to the plans of introducing new technology vehicles, including hybrid and battery electric vehicles (EVS), by 2025.
The production is scheduled to begin at a time when most of the automakers in India — the latest being Tata Motors — are revving up their EV plans amid a policy push and slew of incentive schemes.
The lithium-ion cell manufacturing unit, the largest such plant in India, was set up as a 50:40:10 JV among the three companies in 2017 with an investment of ~1,250 crore. The JV is also expected to receive sops under the government’s production-linked incentive scheme for advanced chemistry cell manufacturing in India.
Lithium-ion cells are the most
critical part of an EV. Most EV makers currently buy batteries and cells from China, the world’s largest producer of Li-ion cells. In addition to meeting the requirements of Toyota and Suzuki for their range of upcoming electric and hybrid models, the unit may also supply to other firms and address export markets, said the person cited earlier.
“We are planning to launch an EV by 2025. In this direction, prototypes testing exercises will be carried out jointly between Suzuki and Toyota,” said a spokesperson
at Maruti Suzuki India.
“Unlike some other players, Maruti follows a bottom-up strategy and has always pushed for higher localisation. It is evident in its approach to electrification, too, as Suzuki has invested in a Liion battery plant,” said Amit Mishra, vice-president, research, at Antique Institutional Equities.
Maruti is working on its plans to localise other critical hybrid and EV components, which will make these advanced technologies affordable and accessible to Indian customers, said Mishra.
Maruti’s greater thrust on localisation will help develop the supply chain of advanced auto technologies in India, he said.
This week, the Tata Group flagship said it would raise $1 billion (₹7,500 crore) as part of its agreement with TPG Rise Climate along with its co-investor ADQ in EVCO, its newly formed subsidiary. The investment will translate into an equity valuation of up to $9.1 billion (₹67,349 crore).
Some believe that Maruti’s delay in entering the EV space will give a competitive advantage to Tata Motors, which is building a range of affordable electric cars. The company has already established itself as the front-runner in the EV space, according to an October 12 research report by Kotak Institutional Equities.
“With a lack of EV launches from Maruti Suzuki, the immediate future and existing models of Hyundai Kona and MG ZS being priced above ~20 lakh, we believe Tata Motors can leapfrog in the EV space with its accessible pricing, higher range, which can improve and focus on rapidly expanding charging infrastructure,” it said.