Maruti Suzuki Chairman Advocates Biogas, Cautions Against EV-Only Path

RC Bhargava, Chairman of Maruti Suzuki India, has expressed significant reservations about India relying solely on electric vehicles (EVs) to meet its net-zero targets. Speaking personally, he champions biogas as a more practical and domestically sourced alternative, highlighting risks associated with an exclusive focus on EVs, particularly increased import dependency.

Biogas: A Cost-Effective, Homegrown Solution

Bhargava pointed to India's vast agricultural sector and large livestock population as foundations for significant biogas production. He suggested biogas could become India's cheapest fuel, boosting the rural economy without requiring imports. This aligns with government initiatives like SATAT (Sustainable Alternative Towards Affordable Transportation) and planned mandatory blending of Compressed Biogas (CBG) into natural gas, aiming for 5% CBG in the fuel mix by FY 2028-2029 to cut import dependence and foster a circular economy.

EV Risks: Import Dependency and Shifting Subsidies

While Maruti Suzuki is developing its own EVs, Bhargava warned that a battery-centric EV model carries substantial risks. The near-complete import of battery cells from China threatens India's energy security, especially given global geopolitical tensions. He also noted that many countries, including the US, Europe, and China, are reducing EV subsidies. Such cuts, Bhargava cautioned, could make EVs unaffordable for a large portion of the Indian population, who typically buy more budget-friendly vehicles where Maruti Suzuki holds a dominant position. Many global companies have faced financial setbacks as actual EV adoption has lagged behind forecasts, a risk India should avoid.

Global and Indian EV Market Dynamics

Global EV sales continue to rise, reaching approximately 20.7 million units in 2025, with China accounting for about half. India's EV market share in the passenger vehicle segment was around 4.2% as of March 2026, though it is growing. Competitors like Tata Motors lead the Indian EV market with roughly 73.1% share and plan new launches. Mahindra & Mahindra is also investing heavily, aiming for 20-30% of its portfolio to be EVs by 2027 and planning seven battery electric vehicles by 2030. Globally, growth rates are shifting, and policy support, like subsidies, is being re-evaluated due to trade tensions. The EU's tariffs on Chinese EVs exemplify these complex trade dynamics.

Maruti Suzuki's Challenges: Market Share and Margins

Despite a general analyst consensus rating of "Buy" with potential upside, Maruti Suzuki faces significant challenges. Mojo Grade recently downgraded the stock to 'Sell' on April 22, 2026, citing rising costs, increased competition, and the rapid shift to EVs. The company's market share reportedly fell to about 39.26% in FY26, a 13-year low, while competitors like Mahindra & Mahindra have nearly doubled their share, driven by SUV sales. Maruti Suzuki's P/E ratio trades at a premium to the industry average, leaving little room for execution errors. Concerns also persist regarding margin sustainability, with reports indicating a 20% rise in commodity costs could substantially reduce operating margins.

A Call for Balance and Diversification

Bhargava's call for a diverse technology roadmap is timely. He suggests that a practical strategy, combining domestic strengths like biogas with ongoing EV development, is crucial for India's energy security and economic resilience. The industry stands at a critical juncture, where successfully balancing rapid electrification with affordability, import reliance, and indigenous potential will be key. While analysts mostly maintain a positive "Buy" outlook, concerns over competition and cost management suggest a complex path ahead for Maruti Suzuki.