Toyota Motor Corporation and Suzuki Motor Corporation have confirmed and inked a memorandum of understanding (MoU) on moving ahead with a cooperative structure for introducing electric vehicles (EVs) in the Indian market in around 2020.
The agreement stems from the two Japanese carmakers having initiated, on February 6 this year, an MoU on beginning considerations for business partnership, after which they began discussing, among other issues, the dissemination of vehicle electrification technologies in India.
Specifically, Suzuki is to produce EVs for the Indian market and will supply some to Toyota, while Toyota is to provide technical support. Additionally, Toyota and Suzuki intend to conduct a comprehensive study of activities for the widespread acceptance and popular use of EVs in India. Such activities encompass the establishment of charging stations, human resources development that includes training for after-service technicians employed throughout sales networks, and systems for the appropriate treatment of end-of-life batteries.
Interestingly earlier today, at the Guangzhou Show, Toyota announced that it plans to introduce an electric vehicle under the Toyota brand in the Chinese market in 2020.
On October 12, 2016, Toyota's president Akio Toyoda and Osamu Suzuki, chairman of Suzuki Motor Corporation, first announced plans to explore a business partnership to strengthen collaboration in the environment, safety, and information technology fields.
Japanese OEMs & suppliers develop EV ecosystem for India
Now things seem to be falling into place. On September 14, 2017, Suzuki Motor Corp laid the foundation stone for the country’s first lithium-ion battery plant at Hansalpur, Gujarat. The facility is set to be operations from 2020. The manufacturing operation will utilise cell modules from Toshiba, while Denso will contribute its expertise by sharing the technology platform. The battery joint venture sees the equity stake split between Suzuki (50%), Toshiba (40%) and Denso (10%). Suzuki Motor Corporation, which is the main driver for the JV, will be aiming to drive home the advantage of manufacturing lithium-ion batteries in its key global market – India – where the government is keen there is greater adoption of electric vehicles (EVs).
In addition to lithium-ion batteries, Toyota and Suzuki plan to locally procure electric motors and other major components for the production of EVs in India. Achieving a high level of localisation from the very start will help the manufacture and sale of EVs at affordable prices. High prices of EVs in the Indian market, along with very few charging stations, have been among the obstacles to their greater acceptability by consumers.
Given the heightened focus on all-electric mobility in India by the year 2030, Maruti Suzuki India will gain sizeably from Toyota and Suzuki affirming plans to make EVs in India. For India's largest carmaker, which has a large stable of conventionally fueled vehicles and a current passenger vehicle market share of 50.12 percent, the lack of an EV in its portfolio would have meant giving an advantage to other PV makers.
Earlier this month, Suzuki Motor Corp CEO, Toshihiro Suzuki had said that the Indian government’s push towards electrification of vehicles had the potential to catch the company by surprise. By teaming up, both Suzuki and Toyota could be better prepared to handle the many hurdles that will be thrown up as India attempts its highly ambitious target of going all-electric by 2030.
Also read: Toyota to roll out new EV in China in 2020