Bavina readies entry into India's electric car market by 2011

Bavina Cars India has announced it will build a $60m factory in Tamil Nadu state that will be capable of producing 25,000 electric cars annually when completed in 2011 – the same year it plans to launch its first vehicle for the subcontinent.

The Chennai-based company said earlier this week that it had received state approval to establish the plant, which will manufacture Bavina's forthcoming Electro car for the Indian market.

The Electro will be the first domestically-made, all-electric rival to those produced by fellow India-based automaker Reva Car Co, known in the UK for its G-Wiz brand of plug-in vehicles.

Reva, meanwhile, is building what it claims is the world's largest factory for low-cost all-electric cars in India's hi-tech hub of Bangalore. Slated to start production in the first quarter of next year, the factory will be capable of making 30,000 vehicles annually.

Reva had earlier told BusinessGreen.com of its plans for the facility, which is aimed at serving a growing global market for green cars.

Bavina and Reva are apparently betting on India's potential to become a centre of low-cost electric auto manufacturing. Reva deputy chairman Chetan Maini told the Financial Times this week that electric cars have about one-fifth the number of components of conventional vehicles, resulting in lower costs.

India-based factories would not only be able to serve markets abroad, but also the growing domestic market. However, while green cars are rising in popularity in markets such as Europe, North America and Japan, India may prove more challenging, due to its lack of public charging points and paucity of government subsidies for buyers.

It may also be some time before the two upcoming plants produce at maximum capacity. Reva said it has sold 3,000 electric vehicles since production began in 2001. Last year, it shifted 500 cars, mostly in Britain and India, and forecasts that sales this year will reach 2,000 units.