IBEF: June 03, 2020
MG Motors India Pvt Ltd, one of the new entrants in the domestic market, intends to increase its investment in the electric vehicle space in India from 2022.
According to a senior executive, the economy is expected to return to normalcy in a couple of years and company feels that such zero emission vehicles will get a significant demand in the domestic market in the medium to long term.
The company plans to launch an affordable electric vehicle in the range of Rs 12-15 lakh (US$ 17,023-21,279), eligible for the subsidy under the Indian government's FAME or Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles scheme. It will also launch a new variant of ZS electric vehicle that will come with a 500-kilometre range.
The company intends to enhance its localization of components of electric vehicles and start assembling lithium-ion batteries and other critical components in India.
Mr Rajeev Chaba, president, MG Motor India said, “This is our mid-term to long term plan. We want to double our bets on electric vehicles in the medium to long term and want to be the leader (in the EV space). That’s why we will come with a battery with 500 kilometres range to show our intent."
China's SAIC Corp-owned company will also introduce its electric sport utility vehicle, ZS, in five new tier-one cities from June. The focus of the company was primarily only on metro cities. In January 2020, the company launched the ZS electric vehicle, as its second product in the Indian market after Hector, a mid-size sport utility vehicle.
These plans are being firmed up irrespective of border standoff between India and China and restrictions imposed by India on Chinese investments.
“Government basically has changed the procedure, and has not said no (to any investments), to which one has to apply and the application has to go through that process and may be it takes another two weeks-time for approval. This is what the government has even clarified to us," Mr Chaba said.
Due to COVID-19 induced economic downturn, the Indian automobile industry is expected to see a significant decline in sales during the current year. Most manufacturers are expected to delay their planned investments in different segments, including electric vehicles.
“Even in 2021 everyone is talking about 8 per cent GDP growth because the base will go down in 2020. So, 2022 will be a good year and all these plans are lined up for then. The battery assembly will happen in our plant but whether it will be done by us or a vendor that has not been decided," added Mr Chaba.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.