Hyundai and KIA have signed a memorandum of understanding with India’s Exide Energy Solutions Ltd to secure battery supply for their electric vehicles and enhance their competitiveness in the Indian market.
The South Korean automotive duo emphasized that the partnership with Exide Energy aims to localize EV battery production in India, focusing specifically on lithium iron phosphate (LFP) cells.
The foray into India is strategically important for Hyundai Motor and KIA who are currently looking forward to progress in the new era of electrification of vehicles. India is also one of the markets where the two companies generate more revenue overseas. From a production-side perspective, labour costs are lower in India compared to China. India also has lithium mines and does not receive IRA Act-related sanctions, making it an attractive destination for the production of battery materials for electric vehicles.
Hyundai plans to invest around $2.40 billion US dollars in the Indian market for 10 years from 2023. This includes introducing six electric car models by 2028 and expanding charging stations. Meanwhile, KIA plans to introduce locally optimized small electric cars to the market starting in 2025.
Exide Energy has already announced that production of EV battery cells will commence by the end of this year, marking a significant step forward for electromobility in India.
In SMM's view, India, as one of the few fast-booming economies in the world at present, combined with its low labour cost advantage and vast internal market, will be another blue ocean for the development of the electric vehicle industry. It is expected that more companies will lay out their industry chain in India in the future and further diversify the global electric vehicle supply pattern.
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