More so than anywhere else, automakers are chasing the holy grail of electric mobility in India: A lower price. Mahindra & Mahindra Ltd.’s launch of its e-KUV at a price of Rs 825,000 ($11, 587), compared to its next cleanest option — a mid-range petrol variant at Rs 650,000 — highlights the challenge of pricing electric cars that can entice buyers.
A global model such as Hyundai Motor India Ltd.’s Kona electric SUV starts at Rs 25 lakh and has sold just about 300 units in seven months since its launch.
More than half of the passenger vehicles sold in India last year cost $8,000 or less, according to BNEF. Electric cars won’t achieve price parity with gasoline-powered cars until the early 2030s, BNEF said.
“Mass adoption of electric cars in India will not happen unless the gap in upfront prices of electric and ICE vehicles is brought down,” said Shantanu Jaiswal, head of research for India at BloombergNEF.
To address this, Hyundai is working on a mass-market electric car for India, according to Tarun Garg, sales director at its Indian unit. The company plans a launch in 2-3 years, he said.
Apart from price, a lack of charging infrastructure that creates range anxiety and rapidly evolving technology, which promises to bring the cost of vehicles down, is also keeping potential buyers on the fringe.
“Pricing EVs at below Rs 10 lakh is going to be very difficult,” Pawan Kumar Goenka, managing director at Mahindra & Mahindra said in an interview. “The price we have done for e-KUV is very aggressive and the reason we’ve done that is to kick start the ramp-up of EVs.”
Goenka expects a decline in cell prices and increased local manufacturing to bring prices down over 3-5 years. Lower prices could drive sales volumes, spreading the fixed costs and lowering prices even further, he said.
Meanwhile, the muted demand for electric vehicles is keeping some automakers on the sidelines.