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Maruti Suzuki bets on hybrid instead of EV

Jingyue Hsiao, DIGITIMES, Taipei 0

R.C. Bhargava, chairman of Maruti Suzuki; Credit: AFP

While major car manufacturers in India are looking for EV expansion, Maruti Suzuki, the top passenger vehicle brand in India, believes that EVs will not be mainstream in the foreseeable future and will focus on hybrid and compressed natural gas (CNG) models instead.

R.C. Bhargava, chairman of Maruti Suzuki, told Bloomberg in an interview that India generates about 75% of its electricity from dirty coal, and it is necessary to use all the available technologies such as CNG, biofuels, and hybrid to reduce the carbon print rather than push any one technology, adding that as the chip supply improves, Maruti expects CNG model sales to increase from 230,000 units in fiscal 2022 (April 2021 to March 2022) to 600,000 units in fiscal 2023.

Vahan Dashboard data shows that CNG car registration in India has increased from 20,800 in 2020 to 78,200 in 2021, and EV registration has increased from 4,220 to 14,601 during the same period. However, Arthur D. Little, a management consultancy firm, predicts that even by 2030, EVs will still account for only about 5% of India's passenger vehicle sales.

Although Maruti Suzuki is not optimistic about EVs, its largest shareholder, Suzuki Motor, through its subsidiary Suzuki Motor Gujarat, announced in March that it would invest JPY150 billion yen (US$1.3 billion) to build two plants for manufacturing EVs and EV batteries and another plant for vehicle recycling, with EVs and EV batteries expected to put into production by 2025 and 2026, respectively.

Furthermore, Suzuki Motor Gujarat is one of the ten companies eligible for the Production Linked Incentive (PLI) scheme for clean automobiles. Maruti Suzuki India is among the 75 companies qualified for PLI for advanced automobile components.

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