At a time when electric vehicles EVs have attracted the attention of industry players and consumers across the world, RC Bhargava, Chairman of India's largest passenger car maker Maruti Suzuki MSIL, remains bullish about the future of internal combustion engine or ICE cars for years to come. The industry veteran believes that the local market will be dominated by the ICE passenger cars during the current decade.
According to a report from the Business Today MindRush event, Bhargava said thatEVs may only form 5 per cent of the Indian passenger vehicle market by the year 2030.
ICE cars will dominate the India market for a longer period than it would be in many developed countries in the world. As we depend heavily on coal fired electricity, adopting EVs on a rapid scale makes no sense. Today, 75 per cent of our electricity is powered by coal. There are many alternatives for reducing carbon emissions from passenger cars than EVs. He said that a Toyota hybrid car cleaner than an EV in India.
India should focus on improving availability and use of alternative fuels, such as bio-fuel and ethanol, rather than pushing for EV adoption. Hybrid cars are a better option than EV in India due to India's dependence on dirtier electricity sources like coal.
According to him, the EVs cost 50 -- 70 per cent more than ICE models, which make them less economically viable for a large segment of Indian consumers.
70 per cent of the cars sold in India cost less than 6 -- 7 lakh. The value for money is very important for the Bharat market of the car sector. The cost of cars has gone up significantly over the past three years due to the transition from BS IV to BS VI. Sales of 4 wheelers have plunged 28 per cent and sales of two-wheelers have plummeted, according to Bhargava.
Bharagav said that the supply situation will improve this year because of the ongoing semiconductor shortage across the world, which has majorly impacted passenger vehicle supply.
The issue started with the arrival of COVID that impacted the production of semiconductors as many factories had to be shit in early 2020. We have learnt a lot of lessons and now we know how to operate. We are in a much better position at MSIL now than last year, with better availability of chips. He said things will improve this year.
Due to the crises, a lesson has been learned that total dependence on overseas companies for supply of key components like semiconductors is not a viable option.