New Delhi: On May 11, South Korean carmaker Hyundai Motor announced its plan to invest US$2.45 billion in the southern Indian state of Tamil Nadu over the next decade. The investment aims to strengthen the production of electric vehicles (EVs) in the country with the highest population. Hyundai Motor India, the automaker’s Indian subsidiary, will establish a battery pack assembly unit that will produce 178,000 units annually and install 100 EV charging stations throughout the state within five years.
Tamil Nadu has become a manufacturing hub for automobiles, with various companies such as Ashok Leyland, TVS Motor, Renault-Nissan, and Hyundai producing thousands of two- and four-wheelers annually. Hyundai’s move comes after the Indian government recently announced an increase in taxes on imported cars and motorcycles, including EVs, to promote local production.
Although India’s EV industry has grown substantially, it still accounts for only 1% of total car sales in the country as of 2022. The government aims to raise that number to 30% by 2030 as part of its efforts to decrease pollution and reduce fuel imports. Domestic carmakers Tata Motors and Mahindra & Mahindra, as well as global rivals BYD and SAIC’s MG Motor, are among those launching EVs in the country.
As of April, Hyundai held nearly 15% of the market share in India’s passenger vehicle industry, ranking second behind Maruti Suzuki. In February, Nissan Motor and Renault pledged to invest US$600 million to develop two EV models and four sport-utility vehicles for sale in India and other countries.
Hyundai’s investment in Tamil Nadu demonstrates its commitment to India’s growing EV industry, which is rapidly expanding, driven by the government’s efforts to reduce pollution and promote local production. The establishment of a battery pack assembly unit and EV charging stations will strengthen the supply chain for EVs, making them more accessible to consumers in the region.