Business, Economics and Jobs

Electric cars in India: Where's the buzz?


BANGALORE, India — Amidst the chaotic traffic in crowded Indian cities, there is an occasional blur of cheery red or a burst of brilliant yellow. It is the cutesy, four-seater hatchback called Reva, a made-in-India electric car.

By all measures, India is a country ripe for an electric car revolution. Its cities are super-polluted. Its roads are choked with every type of vehicle imaginable. You would think that the small, fuel-efficient, battery-powered Reva would be the perfect solution.

But only 3,500 Reva cars have been sold worldwide so far, a fraction of the number that India’s biggest carmaker, Maruti Suzuki, sells every month. India is the world's biggest maker of electric cars — at least currently — but Reva’s home country has simply not adopted the battery-powered car.

“I don’t see much of a market for electric cars in India for the next six or seven years,” says Vaishali Jajoo, automobile industry analyst at Mumbai-based Angel Broking. India is a growing economy so cheaper, smaller cars will rule, she says.

“It is high-priced and can only take you 50 kilometers on full charge,” agrees Anisha Tiwari, a Pune-based law student who drives a blue Reva. But Tiwari says she loves everything else about the car. Its size lends itself to easy parking and quick maneuvering on the congested roads. “Also, it gets a lot of attention,” she says.

The U.S. market is preparing for multiple electric car launches by the year's end. In India, Reva is building an ambitious facility that can produce 30,000 electric cars annually. Action is revving up in the e-car space globally and some of it is spilling over to India as well.

Earlier this month Reva’s manufacturer, the Bangalore-based Reva Electric Car Co., sold controlling stake in the company to India’s largest sports-utility-vehicle manufacturer Mahindra & Mahindra.

General Motors, which had a venture going with the makers of Reva, scrapped the plan after the stake sale. The Detroit-based company said it would develop its own electric car for India.

Mahindra & Mahindra’s large manufacturing portfolio, its wide dealer network and worldwide presence should help shore up electric car production and sales in India. As for General Motors, besides developing a car for the Indian market, the carmaker will also bring its Chevrolet Volt electric car to India post its debut in the U.S. market later this year.

However, the electric car market here is fraught with challenges.

In India, for instance, power charging infrastructure is scarce.

“The efficiency of the car, the lack of charging infrastructure, maintaining battery-powered cars are all issues,” says Sugato Sen, senior director of the New Delhi-based Society of Indian Automobile Manufacturers.

The Reva’s limited battery capacity has certainly been a drag on sales. The need for repeated charging is putting off buyers. The car must be plugged in daily after use, making it a logistical nightmare to own and drive.

Additionally, India offers no inducement to become a convert to greener, low-on-emission electric cars, unlike the United States where the government provides generous tax subsidies for buyers of environment-friendly vehicles. “In every country where electric cars are sold, governments have played a strong enabling role but there is no such government push in India,” says Sen.

Reva’s modest seating space and, of course, its price are other sore points with car buyers in India. Here, small car competitor Nano sells for $2,500 but a Reva costs several multiples of that. So will any others launching in the future? All signs now point to a rough road ahead for electric cars in India.