Bigger is better in India’s nascent electric car market

As India’s growing consumer aspirations to own larger vehicles to deal with its notorious potholes and traffic jams, automakers are turning to low-cost, battery-powered SUVs. It’s taking a bet and trying to capture the up-and-coming electric vehicle market.

A new breed of EV took center stage at the country’s major auto show in New Delhi earlier this month, with mostly foreign companies trying to tap into the nascent electric scene. In a notable change in rhetoric, local auto company bosses also excitedly spoke about the prospects of the sector.

Domestic manufacturers Tata Motors and Mahindra & Mahindra are competing with Chinese giants BYD and SAIC and South Korea’s Hyundai. Even Maruti Suzuki, India’s largest automaker, has announced a compact electric SUV that it says will hit the market in 2025, EVs that have been mostly poopoos so far.

Demand for smaller SUVs is soaring in India. They are suitable for a wide variety of country driving conditions, from smooth multi-lane highways to rutted roads crowded with rickshaws, dogs and cows. They also provide a significant yet affordable status symbol for ambitious buyers, putting drivers above the masses.Large electric SUVs also require larger and more expensive battery packs , they tend to be inefficient (and expensive), but their compact counterparts are built on smaller car platforms and are therefore more cost effective.

“The electric car conundrum is lighter, but customers want an SUV,” says Andy Palmer, former CEO of Aston Martin and one of the first mass-market EVs Nissan developed with the Leaf. . Giving the example of Volkswagen using his platform for his ID.3 hatchback he is building an ID.4 SUV, he said, “Using a small car platform to build an electric SUV is an It’s the best for both consumers.”

After poor sales of its battery-powered sedan called the Tigor EV, Tata Motors has introduced an electric version of its Nexon compact SUV in 2020. Priced at 1.4 million rupees ($17,300), he has a range of around 300 km (186 miles) and has quickly become the best-selling electric model in India.

Still, when it comes to passenger transport, the penetration of electricity in India has been slow. Most local manufacturers are reluctant to switch to electric vehicles, citing their high initial production costs, and the lack of public charging points is holding back buyers. According to the Indian Automobile Manufacturers Association, just 1.2% of passenger cars sold in the six months to September were electric. Even EV market leader Tata Motors sold only 12,596 units, despite an almost 120% year-on-year increase in electric sales from the quarter through December.

But India, which may already surpass China as the world’s most populous country, is also a market that automakers cannot ignore. At the same time, some foreign companies are rethinking their strategies regarding China, another giant car market in the world. For example, Stellantis NV closed its only Jeep factory in China due to interference by local politicians. Volkswagen and General Motors, on the other hand, are struggling to maintain their position as local Chinese manufacturers are competing with them.

India not only offers cheap labor, but also a talent pool of mostly English-speaking workers. Prime Minister Narendra Modi has said the country, home to the world’s fourth-largest auto market, will cut emissions to net zero by 2070, a goal that will require curbing transport pollution. is important.

China’s SAIC, which owns British brand MG, began selling SUVs in India in 2019 after buying GM’s factory in the western state of Gujarat. SAIC plans to launch three of his EVs in India by the end of 2024, and ultimately expects 30% of his local sales in India to come from this segment. Meanwhile, Warren Buffett’s Berkshire Hathaway-backed BYD has outlined bold plans to capture his 40% of India’s EV market by 2030.

Tata’s chief financial officer, PB Balaji, said at the auto show: “India’s transition to EVs is very strong and rapid, much faster than people expect. “We are seeing this soon transform into an EV-driven industry.”

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