Maruti Suzuki India is gearing up to localise battery production and other critical components over the coming years as part of its strategy to strengthen the electric vehicle (EV) ecosystem in India.
The country’s largest carmaker currently does not qualify for incentives under the government’s ₹25,938 crore Production Linked Incentive (PLI) Scheme for the Automobile and Auto Components Industry, which mandates 50 per cent domestic value addition (DVA) to avail benefits.
“Right now we are importing the batteries, but yes, we have a plan for localisation. It is very much on the cards in a phased manner over the next few years,” Maruti Suzuki India Senior Executive Officer (Marketing & Sales) Partho Banerjee said.
What did Partho Banerjee say?
Banerjee said EV penetration in India will grow meaningfully only when consumers gain the confidence to buy an electric car as the primary vehicle in a household.
To address this, the company plans to introduce Battery as a Service (BaaS) and subscription models for its first battery electric vehicle, the eVitara, along with an assured buyback programme.
According to Banerjee, assured resale value, combined with options such as BaaS and subscriptions, will help alleviate customer concerns.
He said apprehensions among buyers largely stem from uncertainty around battery degradation, a critical issue given that the battery accounts for nearly 40% of an EV’s total cost.
A few automakers have begun offering assured buyback and Baas to boost consumer confidence.
Manufacturers who have rolled out similar schemes
JSW MG Motor and a few two-wheeler manufacturers have rolled out such schemes. For instance, JSW MG Motor offers an assured buyback plan for the MG Windsor PRO, ensuring it retains 60% of its value after three years. MG also offers BaaS, which lowers the upfront cost as customers do not pay for the battery initially and instead incur a monthly charge.
JSW MG launched the Windsor at a starting ex-showroom price of ₹9.99 lakh, excluding the battery cost. Under the BaaS model, the battery is provided on a rental basis at an additional cost of ₹3.5 per kilometre.
However, some automakers remain sceptical about the viability of the BaaS model, citing financial, logistical and consumer value concerns. Tata Motors, the country’s largest electric carmaker, which had evaluated the model, views it more as a marketing strategy than a practical solution, arguing that it adds complexity and cost for consumers.
Banerjee, too, expects most customers to prefer purchasing the car with the battery included, but said BaaS needs to be offered as an option to accommodate sceptical buyers.
Meanwhile, the higher upfront cost of EVs continues to deter buyers in India’s price-sensitive market, even though electric vehicles offer a lower total cost of ownership over the long term.
While the price gap between EVs and internal combustion engine vehicles has been narrowing, the introduction of GST 2.0 has altered that trend. The tax cut on petrol and diesel vehicles, while retaining the existing GST rate for EVs, has lifted overall vehicle demand but made electric models appear relatively more expensive to value-conscious buyers. This has also put EV penetration targets under questioning.
Industry estimates, made before the GST cuts, had already pegged passenger vehicle EV penetration well below the government’s target of 30 per cent by 2030. The industry now estimates EV penetration at 13–15% by 2030, with overall passenger vehicle sales reaching 5.5–5.6 million units.
“But after the introduction of GST 2.0, we are reassessing the market,” Banerjee said, adding that the company plans to undertake a fresh analysis in the next financial year. Currently, the passenger EV market is growing at around 3% in FY25, with cumulative sales crossing one lakh units.