This puts the country’s largest automaker under short-term strategic pressure. At the heart of the problem is Maruti’s product mix and technology roadmap.
The company has traditionally focused on small, fuel-efficient gasoline cars, with a gradual shift toward powerful hybrids as a bridge to electrification. However, the new draft rules have reduced the supercredit benefit for strong hybrids (from 2.0x to 1.6x) and removed additional concessions for small cars. This effectively erodes Maruti’s previous advantage under the previous framework.
While the introduction of three-year compliance blocks (FY28–30, FY30–32) offers some flexibility, the broader policy direction remains firmly tilted toward accelerating EV adoption. This is where Maruti seems relatively less prepared compared to its peers. Its EV portfolio is still at an early stage and significant scale is expected only in the next few years.
By contrast, competitors like Mahindra & Mahindra and Tata Motors PV already have strong EV strategies and product visibility, making it easier for them to align with increasingly stringent emissions targets.
Even estimates suggest that Maruti will require a lower mix of electric vehicles (between 1% and 3% initially), but a future tightening of norms could require a faster increase in electric vehicles. Additionally, the option to purchase carbon credits provides a support for compliance, but at a cost that could impact margin if the internal transition is delayed.
Therefore, the key problem is strategic. Should Maruti double down on hybrids or accelerate investments in electric vehicles? Now that the political incentives for hybrids are diluted, the company may need to recalibrate its long-term approach.
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