Hybrid, CNG Trump EV For Now At India's Top Carmaker

(MENAFN- Live Mint) Maruti Suzuki India Ltd has launched Victoris, a mid-size sport utility vehicle available in internal combustion (ICE), hybrid, and CNG variants, even as the company's electric vehicle (EV) launch in the domestic market remains pending. The Victoris will be sold through the mass-market Arena dealership network, signalling Maruti's intent to price the vehicle competitively and expand its footprint in the SUV segment, which currently accounts for less than a third of its total sales.

While the company has flagged off the production line of its electric vehicles, the timeline for the launch in the domestic market is still not clear. The company has mentioned that it is looking to launch its EV in the current financial year.

Even after launching, the company has noted that the major growth market for its electric vehicles will be abroad, not in India. Maruti is the only carmaker in the top four with a hybrid offering in the domestic market.

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Other carmakers like Hyundai Motor Indi Ltd have said that it looking to join the hybrid market soon through the launch of a new vehicle.

At the moment, Maruti is betting on big growth for its Victoris model in India and abroad. The new SUV will compete with Hyundai's Creta, Kia's Seltos, and Mahindra's Scorpio-N.

One of the reasons for the company to bet on hybrid models has been the localisation of cells used in hybrid vehicles, thus helping to offer lower prices to consumers.

“You may be interested to know that the Victoris Strong Hybrid version comes fitted with a lithium-ion battery with deep-level localization. The start of production of these batteries began recently at our fellow subsidiary TDSG in Gujarat,” Hisashi Takeuchi, managing director and CEO of the company, said at the launch.

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Moreover, the company is also bullish about CNG's prospects and took its development into account in its product design.

“Our engineers have intelligently modified the platform to accommodate the CNG tank under the body, allowing more boot space,” Takeuchi said at the launch.

While the company has bet on the new vehicle's inclusion of hybrid and CNG powertrains, it doesn't want to target a sales split between the ICE, hybrid, and CNG models.

“We are technologically agnostic. We go for whichever variant based on the customer's need or demand. We have got CNG, smart hybrid and strong hybrid. All options are there for us,” Partho Banerjee, senior executive officer of marketing and sales at Maruti Suzuki, told reporters on the sidelines of Victoris' launch.

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According to experts, Maruti has a lot of space to dominate in the hybrid vehicle space as it can give competition to diesel SUVs if priced competitively.

"Leveraging its Japanese partnerships, Maruti holds an edge in hybrids, having successfully localized the technology. In contrast, its EV journey faces headwinds, as the high-cost platform pushes up pricing. Consequently, the company is strategically eyeing international markets as the prime growth arena for its electric vehicle portfolio," said Puneet Gupta, director at S&P Global Mobility.

Maruti's leadership has repeatedly highlighted the problem of car affordability. In August, Maruti Suzuki chairman R.C. Bhargava said that one of the problems for EVs has been companies' inability to localise cells.

"Nobody is making battery cells in India. One of the problems of electric vehicles today is that people are packaging the cells into batteries, but actual production of cells is not taking place in India," he said.

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As per the Maruti chairman, this is a big hurdle to scaling EVs as it makes the car expensive. Banerjee also highlighted last month that not all consumers' apprehensions about electric vehicles have been resolved.

“The share of electric cars in total sales of passenger vehicles increased to 4.5% (in July) from about 2.5% last year. But the base is still small. Customers are mostly buying EVs as second or third cars,” Banerjee said last month.

Banerjee attributed the weak adoption to the lack of adequate public charging infrastructure, triggering range anxiety for consumers.

Electric vehicles have also faced concerns of a raw material shortage, with China restricting rare earth magnet exports.

While Maruti has been cautious about EVs, it views hybrids as a technology that can help reduce emissions on Indian roads.

Rahul Bharti, senior executive officer, corporate affairs at Maruti Suzuki, toldMintearlier that EV penetration in India is currently less than 3%, and even in the US and Europe, it is 8% and 12%, respectively.

“While all efforts are to maximize this 3%, we cannot say we will do nothing about the balance 97%," Bharti said.

He added that the purpose and effect of strong hybrids is to replace pure diesel or petrol vehicles because they increase energy efficiency by 36-44% and reduce carbon dioxide by 25-31% over petrol vehicles.“Data shows wherever SHEV incentives have been given, EV sales have not reduced but increased," he said.“We want both EV and SHEV sales to grow."

Key takeaways

Maruti launched Victoris SUV with ICE, hybrid, and CNG options-EV launch still pending.

Localized hybrid battery production helps reduce costs and boost affordability.

EVs face hurdles like high pricing, lack of cell manufacturing, and poor charging infrastructure.

Hybrid and CNG are seen as more viable for Indian consumers in the short term.

Maruti remains fuel-agnostic, offering multiple powertrain options based on demand.

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