India's EV race heats up as Hyundai plans to pour $2.4 billion: Reports

South Korean automaker Hyundai Motor Co. is making a major electric vehicle (EV) push in India, a rapidly growing market with a burgeoning appetite for clean transportation. This strategic move comes ahead of a record-breaking $3.5 billion initial public offering (IPO) for its Indian unit, highlighting Hyundai's commitment to the Indian market and its electrification goals.

The investment landscape in India's auto industry is heating up. While Hyundai has traditionally held the number two spot behind Maruti Suzuki, domestic players like Tata Motors and Mahindra & Mahindra are making significant strides, particularly in the booming SUV segment. Hyundai recognizes the need to adapt and is placing a hefty bet on EVs.

Investing in a greener future

Hyundai's commitment to EVs in India is substantial. As per a report by Bloomberg, Hyundai plans to invest a staggering ₹20,000 crore approx ($2.4 billion) to develop and manufacture electric vehicles within the country. This strategic decision acknowledges the growing environmental concerns in India, a nation heavily reliant on older, fuel-intensive vehicles. By focusing on EVs, Hyundai aims to cater to the evolving needs of Indian consumers and contribute to a cleaner transportation ecosystem.

Moreover, the planned IPO isn't just about funding the EV push. Part of the proceeds, amounting to $839 million (around ₹7,000 crore), will be directed towards operationalising their second plant in India by late 2025. This expansion in production capacity will allow Hyundai to meet the anticipated demand for EVs and potentially other vehicle segments.

Electric Creta on the horizon

Hyundai's EV strategy goes beyond just investment. Recognizing the growing popularity of Hyundai Creta, the company plans to launch an electric version in form of Hyundai Creta EV by the first quarter of 2025. This strategic move is likely a direct response to Tata Motors, which is aggressively expanding its EV portfolio with plans to add ten models by 2026.

While Hyundai is making significant strides in the EV space, competition is fierce. Domestic giants like Tata Motors and Mahindra & Mahindra are not sitting idle.

Mahindra plans to invest a substantial $3.2 billion over the next three years to expand capacity for both SUVs and EVs, aiming to launch nine new diesel and gas-powered SUVs and seven EVs by 2030. Notably, Maruti Suzuki, the current market leader, remains absent from the EV market, but their presence and potential future plans cannot be ignored starting with the Maruti Suzuki eVX.

Experts weigh in

Market analysts believe that Hyundai's potential loss of market share could be attributed, in part, to a less diverse product range compared to its rivals. Deven Choksey, managing director at KR Choksey Shares & Securities Pvt., highlights the growing strength of Tata Motors and Mahindra, whose appealing designs and competitive pricing pose a significant challenge.

The upcoming IPO is a significant step for Hyundai in India. The capital raised will fuel its EV ambitions and potentially allow for further expansion. However, the company needs to adapt quickly to retain its position in the ever-evolving Indian auto market.

Focusing on EVs, expanding their product portfolio with a wider range of SUVs, and continually innovating will be crucial to success in the face of aggressive competition.

Check out Upcoming EV Cars in India, Upcoming EV Bikes in India.