Suzuki Motor has agreed to establish a joint venture with Toshiba and Denso to produce lithium-ion batteries in India.
The new company, which will have an initial capital of JPY2bn (US$18.3m), will be 50% owned by Suzuki, 40% by Toshiba and 10% by Denso – Japan's leading automotive components manufacturer.
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A new factory is expected to become operational by the end of the year and will provide a steady supply of batteries to help Suzuki expand output of plug-in hybrid and electric vehicles in the country.
Maruti Suzuki, India's largest vehicle producer, wants to take a leading role in expanding the use of low- and zero-emission vehicles in the country. With most lithium-ion batteries currently imported from China, local production is expected to help reduce costs significantly.
The Indian government also is coming under increased pressure to cut vehicle emissions in its main cities, some of which have air pollution levels among the highest in the world. Alternative forms of vehicle power would also help reduce the country's dependence on fossil fuel imports.
The government is said to be targeting up to 6m electric and hybrid vehicles in circulation in the country by 2020, including two and three wheel vehicles.
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By GlobalDataPenetration of low- and zero-emission vehicles is still very low in India's four wheeler market, however. Around 22,000 electric vehicles were sold in the country in the financial year ending 31 March 2016, compared with total four wheeler sales of around 3.5m units.
