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EV Price Hike? GST 2.0 Alters India's Electric Car Market
15 Dec
Summary
- Maruti Suzuki plans to localize EV battery production in India.
- GST 2.0 changes have increased the relative cost of EVs.
- Battery-as-a-Service and buyback schemes aim to boost EV confidence.
Maruti Suzuki India is strategically planning to localize battery production and other key components for electric vehicles (EVs) in the coming years. This move is intended to bolster the EV ecosystem within India. Currently, the carmaker imports batteries but aims for phased localization over the next few years, as the company does not yet meet the domestic value addition requirements for government incentives.
Partho Banerjee, Maruti Suzuki's Senior Executive Officer, emphasized that EV adoption hinges on consumer confidence in electric cars as primary household vehicles. To address this, Maruti Suzuki plans to offer Battery as a Service (BaaS) and subscription models for its upcoming eVitara, alongside an assured buyback program. These offerings aim to alleviate concerns regarding battery degradation, which accounts for a significant portion of an EV's cost.
Despite efforts like BaaS and buyback schemes by some manufacturers, concerns persist. The introduction of GST 2.0 has made EVs appear relatively more expensive, impacting penetration targets. While industry estimates for EV penetration by 2030 are being reassessed, Maruti Suzuki plans a fresh market analysis, acknowledging that while most consumers may prefer purchasing EVs with batteries included, BaaS options will cater to a segment of buyers.
