Maruti Suzuki questions customs duty hike on imported electric vehicles

Maruti Suzuki India on Wednesday questioned the rationale behind the government's move to hike customs duty on imported electric vehicles, saying it isn't easy to localise in a short period.

The company, which earlier planned to launch an electric vehicle (EV) based on WagonR this year, is reviewing the decision as it is finding it difficult to bring EV to the market at an affordable price.

"I don't understand, why. Why they are increasing the tax?," Maruti Suzuki India Managing Director and CEO Kenichi Ayukawa told PTI when asked about the hike in customs duty on imported EVs, as announced in the Budget.

He further said, "We have to localise but the point is that it is not easy to localise in short-term basis."

As per the Budget announcement, import duties on fully imported commercial EVs will go up to 40 per cent from 25 per cent, while that on semi knocked-down electric passenger vehicles will go up to 30 per cent from 15 per cent.

Completely knocked-down units of EVs will attract import duty of 15 per cent, up from 10 per cent earlier.

The changes will come into effect from April 1.

While EVs have to be considered seriously for sustainable mobility, other factors in the ecosystem also need to change, Ayukawa said.

"Of course we have to target quicker roll out of EVs, but we have to change a lot of things. Power production itself, which is still using coal that is disturbing the environment," he said.

He further said safety issues related to EVs and the ever developing battery technologies need to be kept in mind while going for electric mobility.

On company's plans to bring a mass market EV, Ayukawa said, "We are reviewing it now. At this moment it is not easy to bring an affordable priced EV."

He said the company is trying to find solutions, adding that "otherwise we cannot launch those (EV) like mass production products".

When asked if the company may reconsider getting into diesel segment, Ayukawa said the decision would depend on market demand.

On sales outlook for the next fiscal, he said the situation is still not clear and the demand may start improving from festive season.