The ‘Maruti 800’ Moment For India’s EV Space Is 1-2 Years Away: BNP Paribas

India needs an electric car from its largest carmaker to arrive at an inflection point for EV adoption, according to BNP Paribas. That’s still a couple of years away and critical for achieving 15% penetration by the end of this decade.

In other words, India awaits its “Maruti 800” moment in the EV space. 

“The reason why we have been quite cautious on electrification on the PV side in the past two to three years is because we didn’t have any visibility on such a product from a large OEM,” Kumar Rakesh, IT and Auto Analyst at BNP Paribas, said during an EV Roundtable on Wednesday. “That’s something of a key bottleneck for mass adoption of EVs, apart from charging infrastructure and the rest of the pieces [of the EV puzzle].”

“If you do not have an outside disruptor, you need the largest player in the market to start launching their EVs at a very attractive price point.”

Launched in 1984 by what was then Maruti Udyog Ltd., the Maruti 800 was to Indians what the Ford Model T was to Americans and the Volkswagen Beetle to Europeans—the people’s car. It was a car that was aspirational and then a necessity in an economy that was shedding its agrarian ways to become manufacturing- and service-driven. 

Forty years later, India is the fifth-largest economy in the world and the third-largest automotive market, overtaking Japan, where the Maruti 800 was born. Maruti Suzuki India Ltd. today is India’s largest carmaker, with roughly 40% market share, but lacks an electric car in its line-up.

“We would start seeing the top 2-3 OEMs in the country start launching their EVs later this year or at the at the latest by next year. That should be an inflection point,” Rakesh said. “The availability of the product then becomes quite wide. The price point, obviously, is quite critical, and of course the brand reliability—people are far more comfortable with buying from some of these brands, and that simply reflects in their market share.”

To be sure, the benchmark doesn’t need to be an electric Maruti 800.

“It may not necessarily be in the (small car) segment, like the Maruti 800, because SUVs are now a much bigger proportion of the market,” Rakesh said. “A compact SUV could be the product. But what it definitely needs is participation from the large OEMs.”

India’s EV industry is nascent, so much so that only four so-called “strong hybrid” cars from Maruti Suzuki and Toyota India outsold all electric cars last year. Their market penetration, at present, stands at 2.3%—BNP Paribas pegs this figure at 15% by 2030.

“Customers do not see EVs necessarily as a completely different product. They see it as a different technology or a different powertrain but still a passenger car,” Rakesh said. “The average selling price of a car in India is about Rs 11 lakh or so today. EVs will have to be closer to or lower than that to start seeing any meaningful accelerated adoption.”