Push To India’s EV Industry With Suzuki Motor’s Rs 10,440-Crore Investment 

Push To India’s EV Industry With Suzuki Motor’s Rs 10,440-Crore Investment
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Suzuki Motor, the parent company of Maruti Suzuki, is going to make an investment of Rs 10,440 crore in India for developing a new electric car and battery facility. 

Maruti Suzuki, which sells one out of every two cars plying on Indian roads, plans to provide affordable electric vehicles in both Japan and India by 2025.

The Japanese automaker plans to invest roughly Rs 3,000 crore in the new factory to boost electric vehicle production in India, as well as Rs 7,300 crore in the production of electric batteries that will power the EVs. This investment is the first clear pledge on electrification by India’s top automaker, which has previously stated that the Indian market is not yet ready for electric vehicle sales.

Hyundai and Tata Motors, Maruti’s competitors in the Indian market, have disclosed detailed plans to electrify their vehicles. Despite the impact of the pandemic, sales of four-wheel electric vehicles increased in India in FY21.

Last fiscal year, about 5,500-6,000 cars were sold, which was an increase of about 60%-75% from the previous fiscal year’s 3,400 units.

Suzuki, on the other hand, has been preparing to join the non-IC engine car market through its global partnership with Toyota, and India will play a crucial role in this strategy. Suzuki Motor Corporation (Maruti Suzuki) and Toyota Motor Corporation (Toyota Kirloskar Motors) are the Indian subsidiaries of these companies.  

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According to sources familiar with the situation, both companies are working on a mass EV product that will be supplied to Europe and South Asian countries in addition to India.

“Investing so much money in the Indian market is not justified as there are still doubts how much the domestic market will grow for EVs. It has to be for export, too,” a person with knowledge of the matter was quoted as saying. “Suzuki’s future mission is to achieve carbon neutrality with small cars,” said Toshiri Suzuki, president of Suzuki Motor Corporation.

The new facility will be built near Suzuki’s existing Gujarat factory. Suzuki Motor Gujarat (SMG), a 100% subsidiary of Suzuki Motor Corporation, owns and operates the plant, which supplies vehicles and parts to Maruti. It just began a new production line, bringing its yearly output to 750,000 units.

Suzuki has previously constructed a Lithium-Ion battery pack production factory at Hansalpur, Gujarat, in collaboration with Japanese businesses Denso Corp and Toshiba. Manufacturing is expected to begin this year. Lithium cells are the core of an electric vehicle, and most EV manufacturers now source their batteries and cells from China, which is the world’s largest supplier of Li-ion cells.

Because a big portion of the manufacturing is done in India, the industry expects Maruti to be able to sell an electric car at a lower cost than its competitors. In New Delhi, the most popular electric vehicle, the Tata Nexon, starts at Rs 14.5 lakh.

Suzuki plans to spend 2.2 trillion yen on research and development and capital expansion between 2021 and 2025. Around 1 trillion yen will be spent on R&D, the majority of which will go toward the development of electric vehicles.

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