South Korean carmaker Hyundai Motor India is betting on localization of battery packs to be key in driving down prices of its electric vehicles in the country, top company officials said in response to global scepticism around EVs and lack of affordability being a key hindrance in their adoption.
“Currently, EV penetration in the Indian market is less than 2% but there will be a trigger and adoption will accelerate. The biggest trigger for EV adoption has to be the cost—EV costs should come down and localization is the biggest way for it to happen. The localization of battery packs would be a very big trigger for Hyundai India. So, we feel we can drive 20-22% penetration by 2030. The government’s view is 30% EV penetration by 2030 and some independent analysts feel the number is closer to 15%, but our view is 20-22%,” said Tarun Garg, Chief Operating Officer, Hyundai Motor India Ltd.
“We are investing ₹700 crore on our battery assembly plant in Chennai, Tamil Nadu, which will have a capacity of 75,000 battery packs annually in the first phase by 2025,” said Gopala Krishnan, Chief Manufacturing Officer, HMIL.
Unsoo Kim, the carmaker’s Chief Executive in India told reporters that while the world is currently deprioritizing an EV transition, it is a temporary phenomenon. “Currently the EV market is down. The Ukraine-Russia war is a big factor because European countries want to reduce carbon dioxide emission, but they can’t do so right now due to conflict. They cannot focus and put resources while conflicts go on. I think this is a temporary situation for EV,” he said.
In India, triggers for EV adoption will be led both by government initiatives and by original equipment manufacturers (OEMs). The first PLI (production-linked incentive) scheme for automobiles, the ₹18,000 crore advanced chemistry cell (ACC) battery PLI scheme and growth in charging infrastructure are expected to scale up EV adoption as companies such as Hyundai, Maruti Suzuki, Tata Motors and Mahindra & Mahindra look to charge up their EV offerings in 2024-25. Hyundai is aiming for a made-in-India EV for the mass-premium market in 2025.