The Electric Vehicle (EV) space has dominated global headline lately. Tesla crossed $800B market cap and rocketed its CEO Elon Musk to the richest person in the world. Apple announced that it is developing its own EV, for last 5-7 years and may launch its own EV by 2024, possibly in collaboration with Hyundai.
The EV fever has moved to India as well, with Tesla registering an Indian subsidiary recently. There was a cryptic tweet by Tata Motors EV Twitter Handle of tie up with Tesla, which has sent the Tata Motors stock soaring. M&M has early mover advantage, but have been limited to the commercial usage space. Surprisingly there is no word from Maruti in the sector. Is the PV leader in the space sleeping?
Well, the short answer is no. They are moving in logical steps without the limelight – Petrol to Mild Hybrid to Full Hybrid to Plug In Hybrid to Pure Electric. The reason for this route is Economics. Battery packs are still prohibitively expensive for entry level segment, in which Maruti has a dominant share. So are very well placed to capture the EV segment as charging infrastructure grows.
On the technology front, apart from inhouse expertise of Suzuki and experience of Maruti with battery packs in hybrids, they also have collaboration with Toyota (global leader for decades in Hybrids and recently in Plugin Hybrids) as well as Nissan (leader in EV space in Japan). The one area where Maruti lags is autonomous vehicle or self driving systems, which is not coming to India anytime soon even in the premium segment. That’s a super specialization field where any success is rewarded astronomically (GM subsidiary Cruise raised funding at $30B despite still being in developmental stages – giving it valuation of that of Maruti Suzuki Ltd).
So Maruti is ready to pounce at the EV space over the next few years, as India moves to Electrification in the PV space, while the global players battle it out on the autonomous and self driving space.
And a food for thought - Imagine what can happen to the Maruti Suzuki stock when just an unconfirmed collaboration news can make Tata Motors stock rally!