NEW DELHI: India’s largest carmaker Maruti Suzuki is evaluating the commercial launch of a small electric car next year amid challenges such as high prices along with lack of adequate charging facilities at the disposal of potential buyers.

While the company will be ready with a vehicle in 2020, the launch will depend on the willingness of buyers to pay more for an electric version, said Maruti Suzuki chairman RC Bhargava.

“The WagonR Electric is being tested and will be ready next year,” he told ET. “But what the company can produce and sell will depend on the customer’s willingness to buy the vehicle given the limitations of cost and charging space.”

Maruti Suzuki is currently testing 50 electric WagonRs.

Economic viability will be a key factor. The electric version of a small car may cost as much as Rs 12 lakh, given the current regulatory regime, Maruti Suzuki MD Kenichi Ayukawa told ET recently. That compares with the petrol version of the new WagonR being priced at Rs 4.20-5.70 lakh (exshowroom, Delhi). Ayukawa said Maruti was “studying” a commercial launch.

“It is a mistake to think that businesses are driven by manufacturers—they are customer driven,” Bhargava said. “The price of electrifying a small car can go far beyond the reach of the small car owner.”

The government extends a lower tax rate of 12% on electric vehicles, against 28% on those powered by internal combustion engines. However, it stopped short of incentivising private users for purchasing electric vehicles in the second phase of the FAME (Faster Adoption and Manufacturing of Electric Vehicles) India Initiative.

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Assured Charging Infrastructure Critical

Inadequate parking is another hurdle. Bhargava said most small car owners park outdoors. Assured charging infrastructure is critical for the mass adoption of electric vehicles, he said. “Where will they charge electric vehicles? Where is the infrastructure?”

India is still some years away from electric mobility in the private four-wheeler segment taking flight, said Puneet Gupta, associate director, IHS Markit.

“Even in developed economies, where the purchasing power is much higher, governments are heavily incentivising the technology,” Gupta said. “How the government chooses to support electric vehicles for use among private users post FAME-II (2023 onwards) will decide the future of the segment in India.”

By that time, he predicts, electric two-wheeler makers would have set up some charging infrastructure, battery prices would have come down, and average purchase price of a vehicle would have risen to $12,500-13,000 from about $10,000 now. “The ecosystem will (then) be more conducive for adoption of electric four-wheelers for personal consumption,” he said.

Earlier this week, Hyundai Motor Co research and development head Albert Biermann told ET electric vehicles are likely to gain ground in India as fleet operators use them, given the current regulatory structure and inadequate charging infrastructure. For private users, Hyundai will look at introducing hybrid vehicles. To showcase its technological capability, the company will however go ahead with launch of SUV Kona Electric this year.

Maruti Suzuki had previously announced plans to launch a small electric car at an affordable price around the turn of the decade. The company had last year conducted an extensive market survey to gauge the requirements of Indian customers as far as electric mobility is concerned.

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