Maruti Suzuki defers EV plan, says will not launch Wagon R EV in 2020

Citing lack of charging infrastructure and high cost, India's largest carmaker Maruti Suzuki India has deferred plans to launch its first electric vehicle Wagon R EV for individual customers.

During the Auto Expo 2018, Maruti had said it would launch the vehicle in 2020 and had imported a batch of 50 Wagon R EVs from Japan, which were being tested as a pilot project across the country. Maruti Chairman R C Bhargava on Thursday said the country was still not ready for a mass-market electric car.

"EV is a work in progress for us. We will not launch the Wagon R EV for commercial public use in 2020," he said. "The car is ready but where is the infrastructure (charging)? We can launch the car in the market but it will not find takers unless there are viable means of charging it."

Bhargava also highlighted the high cost of the car as one of the stumbling blocks, a concern Maruti had raised in the past as well. The FAME 2 scheme that subsidises electric vehicles in India is available only for shared fleet ownership. That is what the company seems to be targeting at with the Wagon R for now.

"The biggest cost in an EV is the battery. Where is the battery manufacturing in India?" he said. "The facility that we are setting up with Toshiba in Gujarat is for hybrid batteries and not fully electric batteries."

Hybrids do not get any incentive from the government right now but Maruti along with partner Toyota has been lobbying behind the scenes in favour of hybrids as a suitable intermediate technology before the country gets ready for EVs.

Maruti's decision may come as a dampener for India's robust EV aspirations. Some of other carmakers such as Hyundai, Tata and Mahindra have just begun to launch their EV models. In August, Hyundai launched its first electric SUV Kona in India, while Tata will launch the electric version of its Nexon compact SUV during the first three months of 2020.

Last month, Tata had also launched an extended range version of its e-Tigor compact sedan for individual customers. Earlier, the e-Tigor was available only for commercial fleet owners. Tata also showcased an electric version of its upcoming premium hatchback Altroz in Geneva earlier this year, which it had said would be launched in India by 2021. New entrant MG Motors is also planning to launch its first electric SUV - eZS, in December this year.

Mahindra, which currently sells the e-Verito sedan in the country, also plans to launch at least three electric four wheelers by the end of 2021.

Maruti reported a 39.35 per cent year-on-year (YoY) decline in the net profit at Rs 1,358.60 crore for the quarter ended September 2019 against a net profit of Rs 2,240.4 crore in the corresponding quarter last year. Net sales dropped 22.50 per cent to Rs 16,120.40 crore in the quarter on the back of a 30.2 per cent decline in volumes at 338,317 units during the quarter.

"One of the main factors is increase in the cost of acquisition of the car due to various reasons coming together such as implementation of more stringent safety and emission (BS6) norms, increase in vehicle insurance expenses and hike in road taxes in many states," Bhargava said. "Along with this, the lower availability of finances and increased down payment requirement have affected the affordability of customers to own cars."

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