Hyundai Motor Co, based in South Korea, announced on Thursday that it plans to invest 200 billion rupees ($2.45 billion) in the state of Tamil Nadu in southern India over the next decade. The investment aims to enhance electric vehicle manufacturing in the country with the highest population in the world.
Tamil Nadu is a prominent center for automobile manufacturing, hosting renowned companies such as Ashok Leyland, TVS Motor, Hyundai, and Renault-Nissan, which collectively produce a significant number of motorcycles and cars annually.
Hyundai, through its subsidiary Hyundai Motor India, has announced its plans to establish a battery pack assembly unit with an annual capacity of 178,000 units.
Additionally, the company aims to install 100 electric vehicle (EV) charging stations across the state within the next five years. These initiatives were disclosed in a statement released by Hyundai.
The decision by the carmaker comes shortly after the Indian government announced its intention to raise taxes on imported cars and motorbikes, including electric vehicles (EVs), in order to stimulate local manufacturing.
The EV industry in India has experienced rapid growth, with domestic manufacturers Tata Motors and Mahindra & Mahindra, as well as international competitors BYD and SAIC’s Motor, preparing to introduce their own EV models.
Despite this growth, the EV market in India remains relatively small, accounting for around 1 percent of total car sales in the country in 2022.
The government aims to increase this figure to 30 percent by 2030 as part of its efforts to reduce pollution and fuel imports. As of April, Hyundai held a market share of nearly 15 percent in India’s passenger vehicle segment, second only to Maruti Suzuki.
In February, Hyundai’s rivals Nissan Motor and Renault SA announced a $600 million investment to develop two electric models and four SUVs for sale in India and other markets.