Policy consistency and government support for infrastructure development are crucial for a successful transition to electric vehicles, said Jaehoon Chang, global CEO and president of Hyundai Motor Company (HMC).
The Hyundai CEO is on a two-day visit to India for the listing of the Korean automaker’s local subsidiary, Hyundai Motor India Ltd.
Hyundai India raised Rs 27,870 crore ($3.3 billion) via an IPO, the largest-ever in Indian stock markets. Chang said Tuesday’s listing was the first-ever IPO of an overseas arm of Hyundai.
HMC is still finalising the specific allocation of the IPO proceeds, the company said, adding that the resources will also be used for beefing up the product portfolio and bringing in advanced technologies to India.
Stressing that listing the Indian subsidiary wasn’t a sudden call, Chang said, “India’s capital market is growing and we’ve considered Hyundai’s strategic position here. Listening to investors, leveraging growth markets like India’s capital market not only provides momentum but will positively impact Hyundai’s overall global evaluation, including in Korea.”
“The post-IPO phase is crucial, and we will work to maintain growth infrastructure. That’s why we’re focused on enhancing both production and R&D capabilities here,” he said, adding Hyundai India’s annual capacity has crossed one million units after acquiring the Maharashtra plant of erstwhile General Motors India. “We aim to double the R&D capabilities in Hyderabad. This will not only meet the growing domestic demand but also reinforce India’s role as an export hub for Asia, parts of the Middle East, and Europe. We’re also planning to expand the role of EVs from this base.”
Hyundai Motor India MD Unsoo Kim said, “We see India’s economy very positively. With a young population and strong incentives for manufacturing and infrastructure expansion, India is becoming an attractive investment destination. We believe this IPO is a chance to align with global standards and share our growth story with investors.”
On having stable policies for growth of the Indian EV industry, Chang said, “What is common to every market — government policy consistency is the most important and their willingness to help (establish) the infrastructure.”
“Because from the customer point of view, it’s all about the TCO (total cost of ownership) and how that is beneficial to customer choice. I think those are the very important factors,” said Chang, who along with HMC executive chair Euisun Chung met Prime Minister Narendra Modi during his visit.
EV sales have weakened in India, like several markets globally, due to factors such as range anxiety and scarce charging infrastructure. Sales fell for the fifth straight month by 7.8% to 5,874 units in September, showed data collated by the Federation of Automobile Dealers Associations from the government’s Vahan portal. Chang said the government has a “huge aspiration for decarbonisation”, and therefore, he expects “further continued support from the government as well.” India offers reduced GST rate of 5% on EVs compared to 28% plus cess on petrol and diesel cars, in addition to incentives under the Rs 24,938-crore PLI scheme for the auto sector to boost local manufacturing and adoption of EVs. There are more subsidies to support charging infrastructure development. Hyundai India has firmed up plans to invest Rs 32,000 crore till 2032 to boost production capacity to 1.1 million units across its two manufacturing facilities in Tamil Nadu and Maharashtra.
Work is also underway to develop a vendor base, locally assemble battery packs, and subsequently to produce LFP (lithium iron phosphate) cells with an Indian partner to sell its EVs at competitive prices in the local market. It also plans to launch four EVs, starting with an electric version of the Creta SUV in the March quarter.
“It’s true that we are in the middle of the EV transition but our focus in the market is to enhance our product portfolio first as well as increasing the capacity for the production. This is the baseline, but we have a longer view on how we can extend our capability in terms of building the EV supply chain and EV infrastructure. That is how we are going to build the ecosystem,” said Chang.
