Sales volume of electric vehicles is more important than subsidy for localisation of parts and the automobile industry must find ways on how to generate demand across segments, Maruti Suzuki India MD and CEO Kenichi Ayukawa said May 15.
Speaking at an event here, he said hybrid vehicles which have common components like battery, motor, inverter with EVs, must also be encouraged to drive volumes for easier localisation of components.
"The largest factor which can help localisation is volumes. Volumes are more important than the subsidy itself," Ayukawa said.
He further said, "So, we need to deliberate in every vehicle segment like commercial vehicles, passenger vehicles, two-wheelers and three-wheelers on how to generate volumes."
In the commercial vehicle segment, if state transport corporations can be requested to encourage electric buses, the volume will go up, he noted.
"In cars, the components like battery, motor, inverter etc, are common to electric vehicles, strong hybrid electric vehicles and plug-in hybrid electric vehicles. If we also encourage hybrid vehicles then the volume of these core components goes up," Ayukawa said.
Under FAME-II scheme, which comes with a Rs 10,000-crore outlay to encourage adoption of electric and hybrid vehicles, the government has made it mandatory for EV manufacturers to use locally made key auto components to avail subsidy benefits.
However, EV manufacturers are against the move and have asked the government to consider doing away with the 50 per cent localisation condition for availing EV incentives.
FAME, which was introduced on 1 April 2015, entered its second phase (FAME-2) in April 2019.
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