As electric vehicles pitch rises in India, here's why Maruti is waiting and watching

Tata Motors created history of sorts in the Indian auto space when it recently bagged the single largest order of supplying 10,000 fully electric cars to a government-owned company, pipping Mahindra & Mahindra who has had a monopoly in this market for several years.

Orange city Nagpur became the first Indian city to adopt 200 electric vehicles comprising taxis, buses and three-wheelers.

Karnataka became the first state last month to adopt electric vehicle policy that aims to promote research and development in electric mobility.

The trend of electric vehicles may be gathering pace in India faster than expected with but car market leader Maruti Suzuki, with a current market share of more than 50 percent, is not so enthused by it even as several car makers look prepared to hopping on the bandwagon.

Maruti Suzuki will continue to focus on petrol, diesel hybrid cars and may not have any immediate plans of venturing into electric vehicles even as rival Hyundai has promised to launch an electric vehicle before 2020. Issues with respect to acquisition cost, charging infrastructure, parts supplies, driving range and a clear roadmap from the government are the biggest deterrent for the car market leader Maruti Suzuki.

“When CNG was asked to be fitted in cars, there was no parallel development of supporting infrastructure. Even today, despite there being demand for such cars, CNG fuel stations are far less than required. What guarantee is there that such a thing will not be repeated for electric vehicles?” a senior executive from Maruti Suzuki told Moneycontrol.

Last week, Energy Efficiency Services Limited (EESL), under the administration of Ministry of Power, Government of India (GoI), said it will procure 10,000 electric vehicles from Tata Motors for Rs 1,120 crore.

Tata Motors will supply the Tigor sedan fitted with electric motors instead of petrol or diesel engines. The likely range of the sedan is expected to not be more than 130 kms on a full charge.

Each of the Tata sedan will cost Rs 11.20 lakh (post GST), which is more than twice the entry price of the same car fitted with a petrol engine costing Rs 4.64 lakh (ex-showroom, Delhi).

“What is important is that acquisition cost has to make sense. The larger aspect is about the infrastructure. We have pilots which have started in Nagpur. But then it has to make economic sense because that is how the cost will get recovered. But somehow that is missing. We had showcased an electric vehicle as far back as 2010 when we had made the SX4 hybrid and Eeco electric. Those were built at exorbitant costs. So today people are saying that the costs are coming down they are still very high”, said the Maruti Suzuki executive.

With the car returning a maximum mileage of around 130 kms on a full charge the vehicle will have to be charged every day considering the congested traffic conditions in large cities, believe experts. Mahindra’s four door hatchback e2o Plus delivers a mileage of 140 kms and takes 9 hours for a full charge.

“It’s all about whether the charging stations are ready so that there is no range anxiety. If you start running the EVs of today which run for 100kms (on a full charge) in stop-go traffic like in Delhi, the range will come down. And when you are sitting behind the wheel and see the charge level coming down and there is still 30 kms of travel, the driver has no clue what is to be done next,” added the Maruti executive.