Hyundai Motor India is placing a strategic bet on the localization of battery packs to drive down the prices of its electric vehicles (EVs) in the country, according to top company officials.

Addressing global skepticism around EVs and concerns about affordability hindering their adoption, Tarun Garg, Chief Operating Officer of Hyundai Motor India Ltd, emphasized that achieving cost reduction is crucial for accelerating EV adoption in India.

Garg stated, "Right now, EV penetration in the Indian market is less than 2 per cent 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 per cent penetration by 2030. The government’s view is 30 per cent EV penetration by 2030 and some independent analysts feel the number is closer to 15 per cent, but our view is 20-22 per cent," Garg was quoted as saying.

Hyundai is directing substantial investment towards this goal, with plans to invest Rs 700 crore in a battery assembly plant in Chennai, Tamil Nadu.

The plant, expected to be operational by 2025, aims to produce 75,000 battery packs annually in its first phase.

Unsoo Kim, Chief Executive of Hyundai Motor India, acknowledged the current global slowdown in the EV market but characterized it as a temporary phenomenon. He attributed this slowdown, in part, to the Ukraine-Russia conflict, which has diverted the attention of European countries from their environmental goals.

In the Indian context, both government initiatives and efforts by original equipment manufacturers (OEMs) are expected to drive EV adoption.

Schemes like the production-linked incentive (PLI) for automobiles, the Rs 18,000 crore advanced chemistry cell (ACC) battery PLI scheme, and the expansion of charging infrastructure will boost the transition to EVs.

Hyundai, along with other major players such as Maruti Suzuki, Tata Motors, and Mahindra & Mahindra, is gearing up to enhance its EV offerings in 2024-25. Hyundai specifically aims to launch a made-in-India EV for the mass-premium market by 2025.