Maruti Suzuki, Indias largest automaker, isnt on the EV bandwagon . Maruti is going the hybrid route on the other hand with its latest model, the Maruti Suzuki Grand Vitarra .
Over the weekend, I was reading Morgan Housel's blog.During the 2008 global financial crisis, an author's companion drove around Omaha with Warren Buffett.At this point, the global economy was in jeopardy, and Omaha was no exception.Stores were closed and businesses were shuttered, according to a colleague of the author.
How does the economy recover from this?Buffett asked his friend, Do you know what the best-selling candy bar was in 1962?Buffett replied, Snickers.You might have read hundreds of articles on how technology can transform our lives, but isnt it more important to focus on things that wont be replaced?Maruti Suzuki, India's largest automaker, isn't on the EV bandwagon, as shown by this article.Maruti is going the hybrid route on the other hand with its latest model, the Maruti Suzuki Grand Vitarra.Tata Motors is the undisputed industry leader in the passenger EV segment. In the table below, Ive listed the cost-effectiveness of owning an EV, aside from the lack of charging facilities.So, here's the billion dollar issue: Is Maruti Behind the Curve in the EV Race?I havent even considered the cost of EV batteries' replacement.Marutis' focus on CNG growth seems to be correct.CNGs contribution to the overall passenger vehicle industry stood at 8.5% in FY22. The key statistic here is that Marutis' market share in the small car segment is over 70%.Isn't that a smart move to target the small car segment, where you are the market leader and where the share of CNG fuel is increasing?However, there is a downside to this approach: The market share of small cars is declining and the share of SUVs is increasing.In the SUV segment, Maruti has developed a hybrid technology which is battery plus petrol, rather than its competitor As shown in our analysis, EVs cost only 20% to run.The battery life for an EV is expected to be Rs 0.5-0.6 million as of today, and that's not included in our calculation. Maruti leads the hatchback segment, accounting for 45% of total vehicle sales.Thus, the company's strategy of aiming for CNG rather than an electric vehicle makes sense.Maruti's market leadership as well as favorable cost dynamics makes sense.However, it makes more sense to buy electric vehicles than hybrids if we exclude the battery replacement part. It is not a stock pick and should not be taken seriously.(This video is a promotional video of the day.In the battle against rising inflation, the Federal Reserve raises interest rates by 0.75%.