According to R.C. Bhargava, the Chairman of Maruti Suzuki Ltd., said the carbon footprint of electric automobiles in India would be significantly higher than that of hybrid vehicles because 75% of the nation's electricity is produced from coal. He spoke at the 50th National Management Convention, which was sponsored by the All India Management Association (AIMA).
Bhargava claimed that unless India gets at least 50% of its electricity from sources of renewable energy, electric automobiles will not be considered clean. He added that switching to CNG cars is a superior choice, as CNG is a more environmentally friendly fuel than gasoline, but until then, hybrid automobiles will be cleaner.
Bhargava suggested that perhaps India should switch from electric automobiles to ethanol, hydrogen, and fuel cell possibilities. He mentioned that Maruti had constructed an EV of the Wagon R but that the cost was too high and that now Maruti would enter the vehicle sector with larger electric vehicles, which might be more realistic.
Even with 6 electric models, he claimed, only 15% to 20% of Maruti's sales would be made up of electric vehicles. He emphasized that only 2% of Indian auto sales are currently electric vehicles. Regarding Maruti's decision to stop the production of diesel vehicles, Bhargava stated that while the government does not forbid anyone from producing diesel vehicles, doing so will result in expensive expenses due to the need to meet CAFE criteria.
Bhargava stated that although the entire industry is not changing, the small car marketplace is no longer expanding regarding the mass consumer's switch from tiny hatchbacks to SUVs. He claimed that, as a result, the growth of the Indian automobile market is just approximately 5% per year rather than 8%. Speaking of problems with the automotive supply chain, Mr. Bhargava noted that there aren't any currently due to a lack of semiconductors.
The absence of domestic electronics providers, he added, is the sole vulnerability in India's supply chain for auto parts. Bhargava shared his optimistic viewpoint over the expansion of the Indian auto industry. He claimed that no other market in the entire globe has the same development potential as this one because other significant markets, including the US, Japan, and China, have reached saturation and depend on replacement sales.
Mr. Bhargava stated that the Indian auto market has been highly competitive for the previous 15 to 20 years and will now become more competitive as international automakers perceive a possibility in the evolving rules and technology for automobiles.
Bhargava argued that even business owners are more concerned with building their personal wealth than expanding their companies in response to the issue of the static growth of the Indian manufacturing sector, regardless of the improved ease of doing business and the production-linked investment scheme. According to him, India needs a 12% annual growth rate in the manufacturing sector. Bhargava stated that it will be challenging to lower the number of accidents and fatalities on Indian roads if obtaining a driving license without passing any tests is simple. According to him, India does not have a system of required certification of vehicle fitness for cars and scooters.
Bhargava is optimistic about the long-term prospects of the Indian auto sector, even though the costly adoption of new technologies and regulations will probably limit growth for the ensuing ten years to around 5%, barring any unanticipated shocks to the financial system.
