GM and Reva bring Spark to India's nascent electric car market

General Motors and Bangalore-based Reva Electric Car have announced they are to produce a small and affordable all-electric version of the Chevrolet Spark for the Indian market within 12 months.

Under a pact announced last week, the zero-emission car is to be produced using Reva's battery, electric drive train and power management system technologies, with the US auto giant providing the Spark platform and manufacturing facilities.

GM India spokesman P Balendran told the Economic Times newspaper that the partnership would help top accelerate the roll out of electric car technology in the country. "We have a wider network and manufacturing strength, while Reva has the technology," he said.

The companies said that if the all-electric Spark proves successful in India, they will consider launches in China, South Korea and Europe. Reva currently sells plug-in vehicles in the UK under the G-Wiz brand.

However, industry analysts warned that a major potential hurdle to success of electric cars in India lies the lack of charging stations in cities. GM said it hopes to address the problem by working closely with India's national and state governments to roll out battery charging infrastructure.

GM added that it is in discussions with government officials over the potential launch of state-backed green car rebates for motorists. The union territory of Delhi last year launched a 15 per cent subsidy for electric vehicles, in addition to tax breaks and registration charges. However, few, if any, Indian states have yet followed suit.

Reva last year sold about 500 green cars, mostly in India – where its vehicles sell at an average price of about US$8,000 – and Britain. The company is confident that the global market for electric autos will pick up in coming years and is currently building a new plant in Bangalore, which will boast an annual capacity of 30,000 vehicles.

No India sales targets for the all-electric Spark were given, although GM India managing director Karl Slym said it would be in the thousands. The cars will be manufactured a GM's existing plants in Gujarat and Maharashtra, which have a combined annual capacity of 225,000 vehicles.

Ever since GM filed for bankruptcy in the US last year, executives at the company's wholly-owned Indian subsidiary have been assuring local media that sales and finances in the subcontinent have been stable. In fact, excluding Europe, the automaker's overseas sales have grown over the past few years.

Pacts, such as the one with Reva, for green car production abroad would also give GM inroads into emerging markets at reduced costs compared to going it alone.