Maruti Suzuki says EV margins would not match ICE vehicles for a long time

Maruti Suzuki stock price has had a decent start to the year, rising almost 11 percent.

Maruti Suzuki is gearing up for its electric vehicle (EV) debut with the all-new E-Vitara, but executives acknowledge a hard truth—profitability for EVs is a long road ahead. In the company’s post-Q3 earnings call, management made it clear that EV margins won’t match internal combustion engine (ICE) vehicles anytime soon, a reality underscored by continued government subsidies.

"If the profit of an EV was equal to that of an IC, why would the government support so much at the centre level and the state level?" the management said. "The very fact that there is a drastic reduction in GST, there are so many subsidies at different levels—demand side, supply side—means that there is a difference. So for a long time, it is not going to happen."

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Despite this, Maruti is pushing ahead, focusing on cost reduction, localization, and high-range battery technology to drive adoption. The company’s first EV, the E-Vitara, set to launch under its premium NEXA brand, will come with a 500+ km range, advanced safety features, and global market aspirations. The Maruti Suzuki e Vitara will take on the likes of the recently launched Mahindra BE 6, Tata Curvv EV, MG Windsor EV and the upcoming Hyundai Creta EV which will hit the road in January 2025.

Executives stressed that reliability remains a cornerstone of Maruti’s EV strategy. The company has studied consumer complaints with existing EV models and implemented measures to address them, ensuring strong service support. “Suzuki’s name is synonymous with reliability, and we have taken a lot of pains to ensure that these problems do not occur,” it added

Maruti is also preparing its dealership and service network for the EV transition, training mechanics to handle high-voltage systems and rolling out roadside assistance and mobile service solutions. However, as the company balances cost control with consumer confidence, it remains to be seen how quickly EVs can become a viable profit driver.

The automaker is also evaluating its eligibility for the government’s Production-Linked Incentive (PLI) scheme, which could provide financial relief as it scales up manufacturing. Meanwhile, discussions on the next phase of Corporate Average Fuel Economy (CAFE) norms continue, adding another layer of regulatory complexity to Maruti’s EV journey.

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While Maruti’s exports hit record highs in Q3, the domestic market remains a mixed bag. Demand for premium models is strong, but the entry-level hatchback segment continues to struggle. The company expects these trends to persist in the near term, with steady overall growth projected in Q4.

As for quarterly numbers, Maruti Suzuki India reported a 16 percent year-on-year rise in consolidated net profit to Rs 3,727 crore for the third quarter of FY25, surpassing analysts' estimates. A Moneycontrol poll of brokerages had projected the automaker’s net profit at Rs 3,596 crore, reflecting a 15 percent increase year-on-year.

Revenue for the quarter stood at Rs 38,764 crore, marking a 16 percent year-on-year rise, slightly below analysts' estimate of Rs 38,838 crore. On a standalone basis, the company recorded its highest-ever quarterly net sales at Rs 36,802 crore, up 15.5 percent from Rs 31,860 crore in the same period last year. Standalone net profit rose 12.6 percent year-on-year to Rs 3,525 crore from Rs 3,130 crore in Q3 FY24.

Among key segments, utility vehicle (UV) sales rose 20.2 percent to 1,85,298 units, while compact car sales declined 4.6 percent to 1,82,227 units. Mini car sales grew marginally by 2.8 percent to 27,855 units.

Maruti shares closed at Rs 11,977, lower by 1.2 percent from the last close on the NSE. Maruti Suzuki stock price has had a decent start to the year, rising almost 11 percent.

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