The price of a small electric car would be more than double the equivalent petrol model. Even the operational cost of running the two kinds of vehicles, he feels, will not be very different, as the owner of an electric vehicle (EV) will have to deal with a high EMI (equated monthly instalment) and depreciation cost.
Approximately 75 per cent of the India’s car sales come from small cars, and Maruti Suzuki is the largest player in this space.
“For a petrol car with a Rs 500,000-600,000 tag, an EV variant would not be less than Rs 1.2 million today. In India where upfront cost is the key, it would not be attractive to consumers. And for an average car user, the operational cost of running the car even after saving petrol would get neutralised by high EMI cost and depreciation,” according to RC Bhargava chairman of Maruti Suzuki.
“The government can have a target, but there is no sense in having a policy. What will it do? It is the industry that has to study and decide on the implementation of EV. It can go to the government if there are problems, and it is for the government to decide if it can help. Nobody in the country knows all the aspects and issues for the implementation of EVs. Even in China, the numbers are very small,” Bhargava said.
Bhargava ruled out the government subsidy as a way to push EVs, giving subsidies for cars, which are meant for the affluent is not doable in our country. You could only lower duties. However, he pointed out that EVs could make sense for bigger cars initially as the relative difference in the car price would not be that high, compared to small cars.He is much more well-to-do and can pay for the difference.
The Maruti chairman also made a plea to encourage hybrid cars, saying the government’s decision to increase the duty on such cars was a knee-jerk reaction. Bhargava said,
The knee-jerk reaction has no basis as by having more hybrid cars, we will be reducing more pollution. Also, it will be an interim solution for consumers who are worried that there is no charging infrastructure.
Bhargava also said while Maruti would not get into the quadricycle market, he believed these should be used for personal transportation.
Bhargava said many issues like the cost of batteries were still not clear with regard to EVs
“While everyone says it will fall, the demand for lithium, which is available only in some countries, could go up substantially, and that is the key cost of making a battery. So we don’t know whether it will go up or down.”
Source: Business Standard