Suzuki plans ₹10,440 crore India EV push

Suzuki Motor Corp (SMC), parent of the country's largest carmaker Maruti Suzuki India Ltd, on Sunday announced fresh investments of ₹10,440 crore to manufacture electric vehicles (EVs) and batteries in Gujarat in a move that could drive their adoption in the Indian market.

Of the amount, ₹3,100 crore will be used to increase EV manufacturing capacity at Suzuki Motor Gujarat (SMG) by 2025, while ₹7,300 crore has been earmarked for setting up a plant to start making batteries for EVs in 2026. The remaining resources will be used to set up a vehicle recycling plant by Maruti Suzuki Toyotsu that will begin functioning in 2025, SMC said in a filing to the bourses.

This will form part of the overall $1.3 billion package that has been announced by SMC and is a key component of the $42 billion investment target outlined by Japan in India over the next five years on Saturday.


"Suzuki's future mission is to achieve carbon neutrality with small cars," Toshihiro Suzuki, representative director and president, SMC, said at the India-Japan Economic Forum on March 19.

'Will Insulate Maruti Shareholders from Risks'
"We (SMC) will continue active investment in India to realise self-reliant India (Atmanirbhar Bharat)," he said.

The investment announced by SMC on Sunday to build additional capacity for EVs and batteries will insulate shareholders of Maruti Suzuki from risks on returns related to such vehicles, said experts. Earlier this fiscal, homegrown Tata Motors hived off its electric vehicle arm and raised $1 billion from private equity firm TPG and Abu Dhabi-based ADQ to expand operations in the space. While the EV division will house technology, the passenger vehicle unit will manufacture the products for a fee.

"Suzuki has competence in developing small cars," said VG Ramakrishnan, managing partner at Avanteum Partners LLB. "India is the only place in the world where you can make small cars profitably. If Suzuki invests in developing small electric cars and manufactures in Gujarat, it can supply them to Maruti Suzuki, Toyota and other markets globally, and gain cost efficiency."

Maruti Suzuki has said it's on track to launch its first EV in the Indian market by 2025. These vehicles will initially be produced at SMG, which has received approval from the government under the Rs 25,938 crore production-linked incentive scheme.

"India has a big population and there are different kinds of customers," Maruti Suzuki managing director Kenichi Ayukawa told ET recently. "We are preparing some EVs for some sections, not for everyone."

The company is working on various environment-friendly alternatives - CNG, ethanol and flex fuel apart from EVs - for reducing oil imports.