TOKYO -- Japanese compact car maker Suzuki Motor will release its first all-electric vehicle by fiscal 2025, Nikkei has learned, a move that is likely to accelerate an EV shift in the category of compact cars.
The new EV will be released first in India, Suzuki's stronghold, to be followed by launches in Japan and Europe. The first EV model will be made available for 1.5 million yen ($13,700) or less, after government subsidies are taken into account. With Suzuki's entry, all major Japanese automakers are set to enter the EV market.
EV sales have been slow in India, the world's fifth-largest auto market, with annual sales of 3 million units. The country has a goal of making 30% of newly sold cars to be electric by 2030. To achieve that, the government has offered incentives to purchasers of EVs, worth 100 billion rupees ($1.3 billion) over a three-year period starting in 2019. The Indian government in June decided to extend the incentive measures for two more years.
Suzuki has a market share of about 50% in India. By adding EVs to its lineup, the automaker hopes to maintain its competitive edge in the market.
Indian carmakers have already announced plans to release EVs at a price range similar to Suzuki's.
Suzuki's EV foray comes after the company said it would invest 1 trillion yen ($9 billion) by March 2026 for research and development in the area of automotive electrification. As part of a shift to electric powered vehicles, Suzuki has already been offering hybrid cars in India.
The company also has battery production plans under way. A battery plant Suzuki is building in India with Denso, a car parts maker, and Toshiba is expected to open in September to produce lithium ion batteries for Suzuki's hybrid cars.
Suzuki has arrived later than other automakers to the field of EVs, with Japan's five major automakers, including Toyota, already offering the vehicles. Subaru is also developing EVs with Toyota, its business alliance partner. Other Japanese automakers, such as Nissan, Mitsubishi and Honda, are also working on developing compact EVs.
Compact cars are less expensive due to their size. Experts say that the challenge for automakers going forward will be in keeping control of the space that batteries occupy in EVs, without sacrificing the driving range that motorists expect of their cars.