BT MindRush: EVs may form only 5% of Indian cars by 2030, says Maruti veteran RC Bhargava

BT MindRush: EVs may form only 5% of Indian cars by 2030, says Maruti veteran RC Bhargava

ICE cars to rule the local market for years to come with the use of newer fuels types like ethanol and bio-fuel, says the Maruti Suzuki Chairman.

BT MindRush: EVs may form only 5% of Indian cars by 2030, says Maruti veteran RC Bhargava BT MindRush: EVs may form only 5% of Indian cars by 2030, says Maruti veteran RC Bhargava

At a time, when electric vehicles (EVs) have attracted the spotlight of the industry players and consumers across the world, RC Bhargava, Chairman of India's largest passenger car maker Maruti Suzuki (MSIL), remains bullish about the future of internal combustion engine (or ICE) cars for years to come. The industry veteran expects the local market to be dominated by the ICE passenger cars at least during the current decade.

Speaking during the fireside chat at the Business Today MindRush event today, Bhargava said that EVs may only form 5 per cent of the Indian passenger vehicle market by 2030, citing a recent report.

"ICE cars will dominate the India market for a much longer period than it would in many developed countries in the world. As we continue to depend majorly on coal fired electricity, adopting EVs on a rapid scale makes little sense. Even today 75 per cent of our electricity is coal powered. So, there much better alternatives available for us to reduce carbon emissions from passenger cars than pushing for EVs. Today, a Toyota hybrid car cleaner than an EV in India", he said.

Rather than pushing for EV adoption, India should focus on improving availability and use of alternate fuels like bio-fuel and ethanol that are much cleaner alternatives. Hybrid cars are also a better option than EV in India due to India's heavy dependence on dirtier electricity sources like coal.

According to him, the EVs cost 50-70 per cent more than ICE models which makes them less economically viable for a large section of Indian consumers. 

"Further, 70 per cent of the cars sold in India cost less then Rs 6-7 lakh. For the Bharat market of the car sector, value for money is very very important. During the past three years, cost of cars has already jumped significantly due to transition from BS IV to BS VI. As a result, sales of 4-wheelers have plunged 28 per cent and for two-wheelers it has plummeted", said Bhargava.

Semiconductor supply to improve in 2022

Talking about the ongoing semiconductor shortage across the world that has majorly impacted the passenger vehicle supply, Bharagav said, he expects the supply situation to improve this year.

"The issue began with arrival of COVID that impacted the production of semiconductors as many factories had to be shit in early-2020. But since then, lessons have been learnt and now we all know how to operate. Factories are ramping up production too. At MSIL, we are in a much better situation now than last year with better availability of chips. Things will improve this year", he said.

However, due to the crises a lesson has been learnt that total dependence on overseas companies for supply of key components like semiconductors is not a viable option. Bhargava expects the recently launched Production Linked Incentive (PLI) scheme for semiconductors will attracted significant investment and will help building a local production ecosystem for chipsets.

Also Read: ‘Not sure why Tesla deserves special treatment’, says Maruti Suzuki’s RC Bhargava 

Also Read: COVID-19 in India: Highest daily surge in cases reported in 4 months at 17,336 new cases

Published on: Jun 24, 2022, 2:36 PM IST
Posted by: Tarab Zaidi, Jun 24, 2022, 12:56 PM IST