India's largest carmaker Maruti Suzuki is evaluating a plan to launch a small electric car next year amid challenges such as high prices along with lack of adequate charging facilities at the disposal of potential buyers.

RC Bhargava, Maruti Suzuki chairman told the publication that although the first EV will be ready by 2020, the launch will depend on the willingness of buyers to pay more for an electric version.

“The WagonR Electric is being tested and will be ready next year,” he told ET. “But what the company can produce and sell will depend on the customer’s willingness to buy the vehicle given the limitations of cost and charging space.”

We expect the re-elected government to remain reform-minded: Fitch Ratings

According to Maruti Suzuki MD Kenichi Ayukawa, economic viability will be a key factor as the electric version of a small car may cost as much as Rs 12 lakh, given the current regulatory regime. That compares with the petrol version of the new WagonR being priced at Rs 4.20-5.70 lakh (ex-showroom, Delhi). Ayukawa said Maruti was “studying” a commercial launch in an earlier interview with ET.

100th plane of Spice Jet to take off!

“It is a mistake to think that businesses are driven by manufacturers—they are customer driven,” Bhargava said. “The price of electrifying a small car can go far beyond the reach of the small car owner.”

It may be noted that  government extends a lower tax rate of 12% on electric vehicles, against 28% on those powered by internal combustion engines.