Japanese auto majors Toyota and Suzuki will work together on the introduction of electric vehicles in India-- the fifth largest car market-- by 2020. Suzuki, which enjoys a 50 per cent market share in the domestic passenger vehicle segment through its subsidiary Maruti, has decided to produce electric vehicles in the wake of a clear mandate from the government seeking a shift to green mobility.
Both the Japanese companies inked a partnership deal in early February this year. A memorandum of understanding (MoU) was signed to this end. Now, the two auto majors have concluded another MOU on considering a cooperative structure for the introduction of electric vehicles (EVs) in the Indian market in or around 2020, a statement said.
Suzuki will produce EVs for the Indian market and will supply some to Toyota, while Toyota is to provide technical support.
Additionally, Toyota and Suzuki intend to conduct a comprehensive study of activities for the widespread acceptance and popular use of EVs in India. Such activities encompass the establishment of charging stations, human resources development that includes training for after-service technicians employed throughout sales networks, and systems for the appropriate treatment of end-of-life batteries, Suzuki said in a statement.
Early this year, Suzuki announced that it intends to construct a lithium-ion battery plant on the grounds of its recently opened automobile plant in Gujarat. As envisioned by the agreement, in addition to lithium-ion batteries, electric motors and other major components would be locally procured for the production of EVs in India, helping the Indian government fulfil its “Make in India” initiative, even in the field of EVs.
The Indian government has drawn ambitious plans for EVs and aims to convert the entire vehicle fleet in the country to electric by 2030.
It has also decided to tax EVs at a lower rate of 12 per cent under GST, against a minimum 29 per cent tax on conventional fuel cars.
The government is also nudging its ministries and departments to adopt electric cars. EESL, a firm owned by power ministry PSUs, recently floated a tender to purchase 10,000 electric cars to be used by government officials in the national capital region (NCR). Maruti did not participate in this tender that was jointly won by two homegrown auto majors Mahindra & Mahindra (M&M) and Tata Motors.