INDIA REPORT
“India is a key market for vehicle electrification, particularly due to the government’s carbon neutrality goals, which makes securing cost competitiveness through localized battery production crucial,” Heui Won Yang, president and head of Hyundai Motor and Kia’s research and development division.
Source: Business Standard. Read The Article
The electric vehicle (EV) market in India is experiencing significant developments, with both domestic and multinational automotive players vying for a share of the burgeoning market. In this article, we analyze the strategies of two major automotive conglomerates, Hyundai-Kia and Stellantis, as they embark on their EV initiatives in India. By examining their approaches to localization, market expansion, and competitive positioning, we provide insights into the evolving landscape of EV adoption in the country.
Hyundai-Kia’s Localization Strategy: Hyundai Motor Company and Kia Corporation’s partnership with Exide Energy Solutions represents a strategic move towards localizing EV battery production in India. By focusing on lithium iron phosphate (LFP) cells, Hyundai-Kia plans to capitalize on India’s growing EV market while aligning with the government’s carbon neutrality goals. This localization strategy enhances cost competitiveness and also positions Hyundai-Kia as pioneers in integrating domestically produced batteries into their EV models.
The Memorandum of Understanding (MOU) with Exide Energy Solutions underscores Hyundai-Kia’s commitment to expanding its exclusive battery development, production, and supply chain partnerships in India. By leveraging local expertise and resources, Hyundai-Kia seeks to strengthen its foothold in the Indian EV market and gain a competitive advantage over rivals.
Stellantis’ Export-Oriented Approach: In contrast, Stellantis is adopting an export-oriented approach to leverage India’s cost competitiveness in manufacturing and expand its presence in Southeast Asian markets. The export of Made in India ‘E-C3’ electric cars to Indonesia marks a significant milestone for Stellantis as the first multinational OEM in India to export EVs internationally.
By tapping into India’s skilled workforce and manufacturing capabilities, Stellantis aims to position the country as a ‘best cost country’ for its global operations. The company’s focus on exports reflects its strategic intent to capitalize on India’s manufacturing prowess while simultaneously catering to the growing demand for EVs in neighboring markets such as Nepal and Bhutan.
Comparative Analysis: Hyundai-Kia’s localization strategy aligns with its long-term commitment to sustainable mobility and technological innovation. By investing in local battery production, Hyundai-Kia aims to establish a competitive advantage in the Indian EV market while contributing to the country’s economic and environmental goals.
On the other hand, Stellantis’ export-oriented approach reflects its pragmatic focus on leveraging India’s cost competitiveness to enhance global competitiveness. By exporting “Made in India” EVs to Southeast Asian markets, Stellantis seeks to capitalize on India’s manufacturing capabilities while expanding its international footprint.
Conclusion: The strategies adopted by Hyundai-Kia and Stellantis in the Indian EV market reflect their respective priorities, capabilities, and competitive positioning. While Hyundai-Kia emphasizes localization to gain a competitive edge in the domestic market, Stellantis prioritizes exports to capitalize on India’s manufacturing advantages and tap into international demand. As the EV landscape continues to evolve, both companies are poised to play significant roles in shaping the future of mobility in India and beyond. PSR
Aditya Kondejkar is Research Analyst – South Asia Operations for Power Systems Research
