Maruti Suzuki’s CEO and MD, Kenichi Ayukawa, has just said that pricing electric cars in the 5-6 lakh rupee range is practically impossible. This statement comes at a time when Maruti is gearing up to launch its first electric car in India during 2020.
Maruti has tied up with Toyota to build electric cars for the Indian market, and is already in the process of setting up a lithium ion battery factory in Gujarat with Denso – a Japanese auto parts company owned by Toyota. However, recent media reports also report that Maruti may independently develop electric cars for the Indian market.
Here is what the CEO said when asked about the pricing of the upcoming electric car from Maruti,
Affordability is a concern, and we can’t seem to find answers. It’s very difficult (to price the electric car between 5-6 lakhs)… practically impossible, I think so. It (building all-new electric cars or electrifying current cars) is still not clear. We have started planning just now. Affordability has been our philosophy from the very beginning. It has not changed over the past 35 years.
The main reason why electric cars are so expensive compared to say petrol or diesel cars has to do with the high cost of lithium ion batteries. As demand for lithium ion batteries increase with more and more car makers making electric vehicles, the cost of these batteries may go up by even more. This is a key concern of many car makers who are in the process of building electric vehicles.
Governments around the world including the one in India are trying to phase out petrol and diesel cars. In India, the present government wants a large proportion of vehicles to run on electric power by 2030. However, for electric car companies to be affordable enough for mass market buyers, the cost of lithium ion batteries, and charging infrastructure remain major impediments.