Toyota group firms are planning to line up an investment of Rs 4,800 crore (Rs 48 billion) in Karnataka for local production of powertrain parts and other electric vehicle (EV) components, indicating that the Japanese giant could be planning a big India push.
Toyota Kirloskar Motor (TKM) and Toyota Kirloskar Auto Parts (TKAP) will pump in Rs 4,100 crore (Rs 41 billion) along with another Rs 700 crore (Rs 7 billion) by Toyota Industries Engine India, which implies that Toyota may be eyeing to get into the entire EV ecosystem in India.
TKM and TKAP have already signed a memorandum of understanding (MoU) with the Karnataka state government in this regard. The main reason for the investment could be a move towards localisation, in a bid to control costs.
With critical parts being made locally, prices of hybrid vehicles as well as EVs would certainly fall. This would see a lot of buyers flock for the Toyota brand.
This investment will pave the way for local production of electric powertrain parts and boost EV manufacturing in India. It seems this manufacturing facility may not only cater to Toyota but other EV makers as well.
This mega investment will also boost the local supplier base and lead to higher investments as well as more jobs.
“Just from group firms, that is, TKM and TKAP, we are looking at around 3,500 new jobs (direct employment). As the supply chain system builds, we expect that much more will come in later,” executive vice-president of TKM Vikram Gulati had said.
On being asked when production is expected to start, he said while he could not give any specifics, it would be in the near term. Gulati also said that the facility would cater to both the domestic as well as the global markets.
According to the MoU, Toyota group firms will make the investment with an aim at making India a self-reliant manufacturing hub, thus contributing towards the Centre’s Atma Nirbhar Bharat push.
The investments by Toyota will help spur greener technologies that will help lower dependence on fossil fuels and reduce carbon emissions.
Toyota companies have invested Rs 11,812 crore (Rs 1.18 billion) in India so far and currently employ over 8,000 people.
Over the years, Toyota has taken to sustainable business practices and transformed itself from a carmaker to a mobility solutions player.
Toyota’s along with partner Maruti’s pure-electric compact SUVs are set to hit the Indian roads by 2025.
The cars will be designed based on the skateboard platform (that is internally known as 27 PL).The platform is derived from Toyota’s 40 PL electric architecture.
Currently, Toyota thinks hybrids are much better in the interim rather than a straight switch to EVs.
According to the company, this switch can happen gradually. Toyota recently unveiled (globally) the SUV bZ4X, its first all-electric car, which will come with Panasonic’s “safe batteries.”
This is important as many electric vehicles have either exploded or caught fire due to faulty batteries.
So, Toyota is not hurrying on its EV plan. Rather, it is perfecting its battery technology before going full throttle on electric cars. But with its Rs 4,800-crore plan on EV parts, Toyota is definitely going for a big India push for electric cars, at least in the medium to long term.
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