Tesla is seeking to make inroads into Asia’s third-largest economy, where electric vehicles account for less than 1 percent of annual car sales, compared with about 5 percent in China. The sparse charging infrastructure and expensive cost have deterred large-scale adoption of electric vehicles in India, unlike China where Tesla set up its first factory outside of the U.S. and now dominates electric-car sales.
Those deterrents have also turned Maruti Suzuki India Ltd., the top local carmaker that sells every other car on Indian roads, glum about the uptake of electric cars in the nation.
“Unfortunately the technology presently available leads to electric cars being produced at a cost much higher than the conventional cars,” Maruti’s Chairman R.C. Bhargava said in the company’s annual report Monday. “This, along with the lack of charging infrastructure makes it very difficult to sell electric cars to people who can only afford small cars.”
The market penetration of electric vehicles will be “very small” given that only 5 percent of cars sold in India are priced above 1.5 million rupees ($20,169), said Bhargava, who heads the local unit of Japan’s Suzuki Motor Corp. The per capita income in India is only $2,000 — 5 percent of that in Europe and Japan — which puts expensive electric cars beyond the reach of most consumers, he said.
Such statistics have raised concerns that without progress in cleaning up poorer nations’ roads, global warming won’t be kept below dangerous levels even as richer nations plan to phase out combustion-engine vehicles to combat climate change. Most EVs are sold in the U.S., China and Europe, where state-backed purchasing incentives and investments in charging infrastructure make it easier for customers to abandon combustion cars.
To achieve net-zero emissions, Maruti will work on hybrid models, improve technology for cars running on compressed natural gas and look into biofuels, Bhargava said. “The use of hydrogen is also an interesting alternative and should be considered specially to reduce dependence on importing lithium.”