High costs to deter Japanese firms' small EV plans in India

Japanese carmakers are doubling down on electric technology by introducing small electric cars in their home markets, but appear cautious about launching such vehicles in India, citing concerns about their technological and economic viability in the country's price-sensitive small-car market.

- Ayaan Kartik

Suzuki launched its Vision e-sky at the ongoing Japan Mobility Show 2025 in Tokyo, an electric version of the traditional 'kei-car' or small car in the Japanese market. Honda meanwhile showcased its first prototype of a compact electric vehicle, the Super-One. Both vehicles are expected to be launched in Japan by next year, followed by international markets.

While both companies have announced plans to launch new SUVs in India, including electric models, they remain noncommittal about hatchback EV. The hesitation stems from weak unit economics, as high prices make small electric cars unviable in India for now.

This approach contrasts with that of Indian e-two-wheeler makers like Ola Electric, Bajaj Auto and TVS, which target mass-market buyers with sub-₹1 lakh scooters. That strategy lifted electric scooters' share to about 15% of the overall scooter market by the end of FY25.