Hyundai Motor India Ltd (HMIL) is gearing up to make significant strides in India's electric vehicle (EV) market, with plans to introduce four new EV models, including an electric version of its popular Creta SUV, by the last quarter of fiscal 2025. This ambitious move is part of HMIL's strategy outlined in its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (Sebi) as the company prepares for its upcoming initial public offering (IPO).
Currently, HMIL already offers two EV models in India: the high-end premium IONIQ5 and the Kona Electric, priced at approximately Rs 45 lakh and Rs 24 lakh, respectively. However, the company aims to broaden its market reach and enhance price competitiveness through localized production of key EV components such as cells, battery packs, power electronics, and drivetrain systems.
"We are following a transition strategy, starting with premium EVs and progressively moving towards mass-market offerings as India's EV ecosystem expands", HMIL stated in the DRHP. This strategic shift aligns with India's position as the world's fourth-largest market for onshore wind energy, with 46 GW of installed capacity, making it a crucial hub for global wind energy manufacturing.
Ben Backwell, CEO of the Global Wind Energy Council (GWEC), emphasized India's potential in both onshore and offshore wind segments, underscoring GWEC's commitment to collaborating with various stakeholders to foster continued growth. With a membership spanning over 1,500 companies across more than 80 countries, GWEC plays a pivotal role in advancing wind energy globally.
Hyundai's focus on localizing the EV supply chain includes leasing a section of its Chennai Manufacturing Plant to Mobis, a Hyundai Motor Company (HMC) group firm, for assembling EV batteries. This move is expected to reduce import costs and bolster local production capabilities, crucial for scaling up EV manufacturing in India.
Moreover, HMIL is exploring strategic collaborations for battery production and aims to increase localization to qualify for production-linked incentive (PLI) subsidies. The company also plans to transition to a dedicated EV platform to optimize costs and streamline production processes.
In addition to manufacturing, HMIL is committed to developing EV infrastructure in India by establishing charging stations across cities and highways. As of March 2024, the company has set up 11 fast charging stations and plans further expansion to support widespread adoption of EVs.
However, HMIL acknowledged challenges facing the automotive industry, including policy uncertainties and adherence issues due to frequent policy changes. The company stressed the importance of policy stability and transparency to facilitate a smooth transition to advanced technologies and localization initiatives under schemes like 'Atmanirbhar Bharat' and Make in India.
The Indian government's focus on promoting localization through initiatives such as PLI for automotive technology and advanced cell chemistry reflects efforts to reduce import dependency and lower manufacturing costs. Despite these incentives, concerns remain regarding eligibility criteria and benefit availing processes, which HMIL hopes will be streamlined for effective implementation.
HMIL's IPO aims to offer 14,21,94,700 equity shares, constituting 17.5% of its post-offer paid-up share capital, potentially making it India's largest IPO to date, surpassing LIC's Rs 21,000 crore share sale. The IPO proceeds are expected to bolster HMIL's expansion plans, including investments in EV infrastructure, localization initiatives, and enhancing production capabilities.