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Bigger is better in India’s nascent electric vehicle market

In India, where more and more consumers are hungry for bigger cars to cope with the country’s potholes and bad traffic, automakers are betting on cheap battery-powered SUVs to dominate the budding electric vehicle market.


Update on:
January 23, 2023, 15:17 pm

Electric vehicle manufacturers in India are betting on cheap battery-powered SUVs to dominate the budding electric vehicle market.
Electric vehicle manufacturers in India are betting on cheap battery-powered SUVs to dominate the budding electric vehicle market.

At the country’s major auto show in New Delhi earlier this month, a new type of electric vehicle took center stage, with mostly foreign companies looking to enter the new EV sector. young. In a marked change of tone, local auto owners are also excited to talk about the industry’s prospects.

Domestic manufacturers Tata Motors Ltd. and Mahindra & Mahindra Ltd. currently competing with giants BYD Co. and SAIC Motor Corp. of China and Hyundai Motor Co. Korean. Maruti Suzuki India Ltd., which previously mainly sold electric vehicles, has introduced a compact electric SUV that it says will hit the market in 2025.

Demand for small SUVs is growing strongly in India. They are well-suited to the country’s driving conditions, which can vary greatly from flat multi-lane highways to rutted roads crowded with rickshaws, dogs and cows. They also offer avid buyers an important yet affordable status symbol that stands out from the crowd. And while larger electric SUVs tend to be inefficient (and expensive) because they require larger and more expensive battery packs, their compact SUV equivalents are built on an umbrella platform. Small bowls, making them more cost-effective.

“The conundrum for tram “Lighter is better, but customers want SUVs,” said Andy Palmer, former CEO of Aston Martin, who also helped lead the creation of the Leaf by Nissan Motor Co., one of the mass-market EVs. them first. foundation to build an electric SUV that meets the needs of both manufacturers and consumers,” he said, citing the example of Volkswagen AG using the ID.3 hatchback platform to build the ID SUV. .4.

After lackluster sales of the battery-powered sedan called the Tigor EV, Tata Motors in 2020 introduced an electric version of the Nexon compact SUV. With a price tag of 1.4 million rupees ($17,300) and a range of about 300 kilometers (186 miles), the Nexon quickly became India’s best-selling electric vehicle.

However, public adoption of anything that runs on electricity in India when it comes to passenger transport is still slow. Most domestic manufacturers have been reluctant to switch to electric cars because of high upfront production costs, while the lack of public charging points has deterred buyers. According to the Indian Automobile Manufacturers Association, just 1.2 percent of passenger cars sold in the six months to September were electric. Even Tata Motors, the market leader in electric vehicles, whose EV sales in the quarter to December were up nearly 120% from a year earlier, sold just 12,596 units.

But India, which may have overtaken China as the world’s most populous country, is also a market that automakers cannot afford to ignore. At the same time, some foreign players are rethinking their strategies around China, the world’s other major auto market. For example, Stellantis NV closed its only Jeep factory in China due to interference from local politicians while Volkswagen and General Motors Co.

India not only provides cheap labor, but also has a large pool of English-speaking talent. Prime Minister Narendra Modi said the country with the world’s fourth-largest auto market will reduce emissions to zero by 2070 and curbing traffic pollution is key to achieving that goal.

China’s SAIC, which owns the British brand MG, started selling SUVs in India in 2019 after taking over GM’s factory in the western state of Gujarat. SAIC plans to launch three electric vehicles in India by the end of 2024 and expects 30% of India’s local sales to eventually come from this segment. BYD, which is backed by Warren Buffett’s Berkshire Hathaway, has meanwhile outlined a bold plan to capture 40% of India’s EV market by 2030. Stellantis’ Citroen brand on Monday began accepting bookings. space for its eC3 electric compact SUV in India.

Tata’s chief financial officer PB Balaji said at the auto show: “The electric vehicle transition in India is happening very strongly and very quickly, much faster than people are expecting. ”

First published date: January 23, 2023, 15:17 pm IST


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