Maruti Suzuki to Boost Localisation, Introduces BaaS and Buyback Programs

Maruti Suzuki India is preparing to significantly increase localisation of batteries and other critical components over the coming years as part of its long-term strategy to strengthen India’s electric vehicle (EV) ecosystem. The move is aimed at improving cost competitiveness, enhancing supply-chain resilience, and supporting the company’s future EV portfolio.

At present, India’s largest carmaker does not qualify for incentives under the government’s ₹25,938 crore Production Linked Incentive (PLI) Scheme for the Automobile and Auto Components Industry, which requires a minimum 50 per cent domestic value addition (DVA) to avail benefits.

Battery Localisation Plans in the Pipeline

Phased Localisation Strategy

Maruti Suzuki currently imports batteries for its electric vehicles but has outlined a clear roadmap for localisation.

“Right now we are importing the batteries, but yes, we have a plan for localisation. It is very much on the cards in a phased manner over the next few years,” Maruti Suzuki India Senior Executive Officer (Marketing & Sales) Partho Banerjee said.

Localising batteries and high-value components is expected to be a crucial step in helping the company meet government norms and reduce EV costs in the long run.

EV Adoption Hinges on Consumer Confidence

Primary Vehicle Acceptance Is Key

Banerjee emphasised that EV penetration in India will rise meaningfully only when customers feel confident buying an electric car as the primary vehicle in a household, rather than as a secondary option.

To address this challenge, Maruti Suzuki plans to introduce Battery as a Service (BaaS) and subscription models for its first battery electric vehicle, the eVitara, along with an assured buyback programme.

BaaS, Subscription and Buyback to Address Key Concerns

Tackling Battery Anxiety

According to Banerjee, assured resale value combined with flexible ownership options such as BaaS and subscriptions will help ease buyer hesitation.

He pointed out that most consumer apprehension stems from concerns around battery degradation, especially since the battery accounts for nearly 40% of an EV’s total cost.

He said apprehensions among buyers largely stem from uncertainty around battery degradation, a critical issue given that the battery accounts for nearly 40% of an EV’s total cost.

Automakers Already Using Buyback and BaaS Models

Industry Examples

Several manufacturers have already introduced similar schemes to boost EV adoption.

• JSW MG Motor and a few two-wheeler manufacturers have rolled out assured buyback and BaaS offerings.

• JSW MG Motor offers an assured buyback plan for the MG Windsor PRO, guaranteeing it retains 60% of its value after three years.

• MG also offers BaaS, which lowers the upfront purchase cost by separating the battery from the vehicle price.

MG Windsor Pricing Under BaaS

• JSW MG launched the Windsor at a starting ex-showroom price of ₹9.99 lakh, excluding the battery cost.

• Under the BaaS model, the battery is provided on a rental basis at an additional cost of ₹3.5 per kilometre.

Mixed Industry Views on BaaS Viability

Skepticism Among Automakers

Despite growing adoption, some automakers remain cautious about the BaaS model. Tata Motors, India’s largest electric carmaker, has expressed reservations after evaluating the concept.

The company views BaaS more as a marketing strategy than a practical solution, citing concerns over:

• Added complexity

• Higher long-term costs

• Limited consumer value

Banerjee acknowledged these concerns, noting that most customers are still likely to prefer buying the car with the battery included, but stressed that BaaS must be offered as an option for sceptical buyers.

High EV Prices Still a Barrier in India

Impact of GST 2.0

The higher upfront cost of EVs continues to deter buyers in India’s price-sensitive market, even though EVs offer a lower total cost of ownership over time.

While the price gap between EVs and internal combustion engine vehicles had been narrowing, the introduction of GST 2.0 altered this trajectory.

• The tax cut on petrol and diesel vehicles

• Retention of the existing GST rate for EVs

has made electric models appear relatively more expensive, even as overall vehicle demand has risen.

EV Penetration Targets Under Review

Revised Industry Estimates

Industry estimates made before the GST cuts had already placed passenger vehicle EV penetration well below the government’s 30% target by 2030.

Following recent developments, the industry now expects:

• EV penetration at 13–15% by 2030

• Overall passenger vehicle sales of 5.5–5.6 million units

“But after the introduction of GST 2.0, we are reassessing the market,” Banerjee said, adding that the company plans to undertake a fresh analysis in the next financial year.

Currently, the passenger EV market is growing at around 3% in FY25, with cumulative sales crossing one lakh units.