Suzuki Motor Corp will enter the electric vehicle (EV) market by 2025 starting with India which is its largest market, Nikkei reported on Monday.

The carmaker plans an all-electric compact model to be made available for around 1.5 million yen (Rs 10 lakh) after factoring in government subsidies, the Nikkei report said.

The company’s subsidiary Maruti Suzuki is the market leader in the Indian market with a close to 50% market share and records higher earnings than the parent company in Japan.

Kenichi Ayukawa, Managing Director and CEO, Maruti Suzuki India had told journalists in India earlier this year that the company has an alliance with Toyota for developing an EV for the future. He had said that the market itself is not too big for EVs, at present so it will take time. But at the same time he said that Maruti Suzuki is also continuing to develop EVs. The company has been working to develop an electric WagonR for India. Suzuki itself lags behind its rivals in EVs and the collaboration with Toyota is expected to help the company bridge this gap. 

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India is giving a big push to EVs and both the Central government and various state governments have announced incentives to speed up the adoption of electric vehicles.

The Union government had recently extended the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric vehicle (FAME) scheme by two years to March 31, 2024 in order to cut pollution and reduce dependence on oil imports.

The Department of Heavy Industries announced a 50% increase in incentives for electric two-wheelers to ₹15,000 per kilowatt hour from ₹10,000 per kWh. According to the new rules, the cap on incentives will be limited to 40% of the total price compared to the earlier cap of 20%.

The Fame scheme was announced in 2019 with an outlay of ₹10,000 crore and the government expected to incentivize the purchase of 7,090 electric buses, 35,000 four-wheelers, 500,000 three-wheelers and 1 million two-wheelers. 

Maharashtra announced its new EV policy for 2021 last week. The Maharashtra EV Policy 2021 is offering many incentives for early adopters of electric vehicles in the state. Including two-wheelers, three-wheelers, four-wheelers, busses and even transport vehicles, all will carry incentives with a rate set at Rs 5,000/kWh battery capacity till the end of the year. Other states such as Rajasthan and Delhi have also put in place attractive incentive schemes to promote the use of EVs.