Maruti Suzuki to launch first electric vehicle this fiscal year but continues to promote hybrid, CNG

India’s largest carmaker, Maruti Suzuki, has announced plans to launch its first electric vehicle (EV) within the ongoing financial year. The company will also promote eco-friendly technologies such as strong hybrid, biogas, flex fuel, and CNG to reduce emissions and fuel consumption. In the company's annual report, Chairman R C Bhargava emphasised the need for a policy framework to accelerate the adoption of alternative technologies, which could decrease the reliance on petrol and diesel vehicles.

Bhargava stated that offering cars with various technologies at different price points is the best strategy given India's resources and economic conditions.

Maruti Suzuki plans to introduce electric cars soon, but Bhargava also urged customers to consider cars with strong hybrid technology, CNG, ethanol, and biogas. He highlighted that while electric cars will play a significant role, reducing the use of petrol and diesel vehicles should be prioritised. Strong hybrid vehicles can cut fuel consumption by 35-45 per cent, and biogas, being renewable and carbon-negative, offers significant environmental benefits. The automotive industry in India is divided over the extension of benefits to hybrid vehicles. Companies like Maruti Suzuki and Toyota advocate for rationalised taxes on hybrids to encourage a shift towards electric vehicles, while other manufacturers like Tata Motors and Mahindra & Mahindra believe such benefits might slow down the adoption of fully electric vehicles. India currently imposes a 5 per cent GST on EVs, compared to 28 per cent (plus cess) on hybrids.

Some state governments also offer incentives for EVs, including registration fee waivers. Bhargava addressed criticisms about the company’s perceived slow pace in manufacturing electric vehicles, explaining that a diversified approach was adopted to meet national objectives. He stressed that rapid acceptance of EVs depends on lowering costs and developing charging infrastructure, primarily through localised production and technological advancements.

Maruti Suzuki aims to balance its production by offering both high-cost SUVs and affordable small cars. The company acknowledges the importance of small car sales for attracting first-time buyers and sustaining market growth. Despite a decline in small car sales due to increased acquisition costs and a shift towards feature-rich SUVs, Bhargava affirmed the company's commitment to producing low-cost small cars to meet the needs of the larger population.

Maruti Suzuki’s Managing Director, Hisashi Takeuchi, highlighted the low car ownership rate in India, with only 3% of the population owning cars. He expressed a personal mission to bring the “joy of mobility” to more Indians, viewing India's goal of becoming a developed nation by 2047 as an opportunity for growth. In the 2023-24 fiscal year, India’s passenger vehicle market hit a record high, making it the third-largest globally. Maruti Suzuki's strategic approach includes launching its first EV later this fiscal year and expanding to half a dozen models by FY31. The company is also exploring the potential of biogas production from agricultural, animal, and human waste, aiming for supportive government policies to accelerate this development.