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Maruti Suzuki to procure battery packs from Suzuki JV in hybrid cars push

LiveMint logoLiveMint 28-04-2017 Amrit Raj

New Delhi: Maruti Suzuki India Ltd will procure lithium-ion battery packs from a newly formed joint venture (JV) between Suzuki Motor Corp., Toshiba Corp. and Denso Corp. as the country’s largest carmaker looks to build a portfolio of hybrid cars, a top company executive said.

“Nobody is producing lithium-ion batteries in India. To realize that (electric) vehicle, we need lithium-ion batteries. That’s why Suzuki decided to make lithium-ion battery packs here. They are already collaborating in Japan to produce hybrid vehicles. They want to take up this challenge here,” Kenichi Ayukawa, managing director and chief executive of Maruti Suzuki India, said on the sidelines of a press conference on Thursday.

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“We want to use those batteries for our cars,” Ayukawa said.

The all-Japanese joint venture company will be established this year and will start production soon thereafter. The initial capital expenditure will be 20 billion Japanese yen (around $184 million).

The joint venture company will be led by Suzuki, which will hold a 50% share. Toshiba and Denso will have 40% and 10%, respectively, Suzuki Motor said in a statement.

The move will be crucial for the success of India’s electric vehicle pursuits as it will bring down the cost of batteries and prop up the sales of electric vehicles at a time when vehicular pollution has come under severe scrutiny from the judiciary, the government and non-governmental organizations, or NGOs.

Currently, lithium-ion batteries account for 50% of the cost of an electric vehicle, making these cars expensive as compared with traditional cars. The batteries are mostly imported from China.

When asked about the time Maruti could take to develop hybrid and electric models, Ayukawa said, “If we start right now, it takes three years to complete the construction of the model. In the next five years, we have plans for some hybrid models. Already, we have started mild hybrids.”

Maruti sells mild hybrid technology in its vehicles such as Ertiga and Ciaz.

In a 28 April note to investors, analysts at Morgan Stanley said that by investing in electric vehicle battery capacity in India, “Suzuki looks to ensure that the franchise is geared for any change in landscape”.

On the same day, CLSA said, “Maruti plans to launch hybrid models using this facility in future, which could give it a solid head start over its peers.”

In the Indian automotive market, where compact cars are the principal models, the introduction of sustainable technology suitable for such affordable cars is required.

Local manufacture of lithium-ion batteries will help India bring down its dependence on fossil fuel.

The country imports around 80% of the oil it consumes.

India’s energy import bill is expected to double from around $150 billion currently to $300 billion by 2030.-

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