A few years back, Indo-Japanese auto major, Maruti Suzuki flagged-off a number of electric vehicle test mules under the WagonR brand for testing and evaluation in the Indian market. The electric hatchback has been one of the most anticipated launches in the Indian automotive industry but the plans seem to be dwindling, as Maruti Suzuki is likely to shelve the project for the next couple of years.
According to a media report, the WagonR EV project could have been dropped from the timeline due to techno-economic viability which means that the technological and financial risk for the company could be too high at this time. This could be due to the disruptions caused by the COVID-19 pandemic which may have caused disturbances to the supply chain as well as the research and development of the project. The delays are expected to be in the range of one to six quarters. The pandemic situation and the de-grown auto industry has also caused changes to the company’s capital expenditure plans.
One of the reasons the brand has decided to shelve the project could be its price. The WagonR EV was speculated to be retailed around the INR 12 lakh mark which is deemed too high for the market at present. The internal combustion engine-powered WagonR is priced close to the INR 5 lakh mark which makes the electric vehicle cost more than double and hence it would not attract small hatchback buyers.
The main reason for the high cost could be the use of imported components and to qualify under the FAME-II subsidy the manufacturer will have to localise more than 50% of the vehicle in India which includes its battery and motor. The brand is expected to commence operations on a newly installed lithium-ion battery manufacturing plant in Gujarat which is expected to begin operation later this year. This could bring the costs down on the WagonR EV, reviving the project.
By the time the Maruti Suzuki EV is ready, the trend shift towards the SUV segment could lead the brand to consider launching a battery-powered crossover or a small SUV.