A Suzuki Motor Corp. e-Survivor compact sports utility vehicle (SUV) stands on display at the Tokyo Motor Show in Tokyo, Japan. (Photographer: Noriko Hayashi/Bloomberg)

Suzuki Readies Electric Vehicles for India After China Retreat

(Bloomberg) -- Suzuki Motor Corp. will start road tests of electric vehicles in India starting next month as part of a plan to bring a battery-powered model as early as 2020, signaling undivided focus on its biggest market after announcing its exit from China this month.

The company will test 50 EV prototypes to help develop easy-to-use cars that can withstand the country’s heat, dust and traffic conditions, Chairman Osamu Suzuki said in New Delhi Friday. The automaker will also begin production of lithium-ion batteries for cars at its plant in the western state of Gujarat in 2020, he said.

While the South Asian country doesn’t have a clear guiding policy for promotion of EVs at present, the Hamamatsu, Japan-based minicar maker is gearing up for a future when policy makers could start cracking down on polluting fossil fuels, following other countries such as neighboring China. Suzuki, partnering with Toyota Motor Corp. in India, has said that it needs to make 1.5 million EVs by 2030 if it has to retain its 50 percent market share.

“We will continue to dedicate ourselves to the realization of a sustainable mobility society in line with great concept of Make In India,” Chairman Suzuki said at a conference, referring to Prime Minister Narendra Modi’s call to global companies to manufacture locally and create jobs.

While India is often touted as the potential next-big EV market, the absence of active government support would mean the market will continue to lag behind those such as China, according to Bloomberg New Energy Finance, which estimates sales of 2,000 EVs in 2017.

In China, on the other hand, incentives of as much as $7,000 for an EV with a range of 400 kilometers (249 miles) or more have helped make the country the world’s biggest EV market. The Asian giant is targeting sales of 7 million new-energy vehicles by 2025, which may account for 15 percent of the vehicle market by then, according to China Association of Automobile Manufacturers.

Pawan Goenka, the managing director of Indian SUV maker Mahindra and Mahindra Ltd., said 30 percent of new vehicles in India will be EVs by 2030. The company currently makes 500 electric vehicles a month and is slated to ramp up the capacity to 5,000 a month by 2022. Hyundai Motor Co. has announced plans to bring an EV to India by next year.

©2018 Bloomberg L.P.