Import Dependence for EV Components Making Cars Expensive: R C Bhargava

Import dependence of Indian automobile industry for EV components is making electric vehicles expensive for the masses to buy, said Maruti Suzuki Chairman R C Bhargava on Friday.

Bhargava said that India’s component infrastructure for electric cars was not well developed and hence, automobile companies had to rely on imports. EV infrastructure not only includes charging points but also a robust ecosystem of local component suppliers, which was missing in the country at present, Bhargava said.

The Maruti Suzuki Chairman was addressing a virtual press conference after the company announced its quarterly and annual results on Friday.

“For any automobile (company), the component infrastructure is an exceedingly important aspect. You take the battery. There is no company yet manufacturing batteries in India at a competitive price. Most of the internal parts (of an EV) are also imported. The result is that all electric cars in India become high priced,” he added.

According to him, higher price points of EVs compared to their ICE variants were limiting the adoption of the new energy vehicles in the country.

India currently relies heavily on imports from countries like China, Japan and South Korea for sourcing critical EV components like battery cells and minerals. However, companies like Ola Electric have started working on the battery cell technology. Major industry OEMs like Rajesh Exports, Amara Raja, Reliance, and Adani Group are in the planning stage to build lithium-ion battery cell factories. 

According to an S&P Global report, by the year 2030, 13% of total EV battery cell demand in India will be met domestically, with the rest still outsourced from other countries.

Maruti Suzuki is widely credited for catalyzing the development the country’s now $74 billion automobile component industry which contributes 2.3% to the country’s GDP and employs about 1.5 million people directly. In FY24, India’s auto component exports reached $21.2 billion, with a trade surplus of $300 million, and are projected to hit $30 billion by 2026.

Bhargava said that the income tax concessions announced in the Union Budget for FY26 were not enough to raise the demand of passenger vehicles in the country. He asked for the government to cut taxes and ease regulations related to EVs to spur demand growth.

He also said that Maruti will start delivering its first electric car e Vitara by September. However, most of those cars will be exported. The company plans to sell about 70,000 EVs this financial year.

Maruti Suzuki Q4 results

The company on Friday announced its fourth quarter results. It reported a 4.3% year on year decline in standalone profit to Rs 3,711 crore. The company posted a 6.4% increase in revenue from operations to Rs 40,674 crore in Q4FY25.

Also, India’s largest four-wheeler maker said its annual vehicle sales hit a record in FY25 to over 2.23 million out of which more than 1.9 million units were sold in the domestic market while 3.32 lakh vehicles were sold in the foreign markets. The company’s exports increased by 17.5% on a year on year basis compared to 2.7% growth in domestic sales.