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| Workers are seen at a Hyundai Motor factory in Chennai, India. Courtesy of Hyundai Motor |
By Kim Bo-eun
Carmakers are increasingly focusing on India's market for electric vehicles (EV), given that it is projected to grow substantially in the coming years, as the country accelerates its drive to tackle air pollution and reduce its dependency on oil.
India's electric vehicle market is expected to reach $17 billion in scale by 2026, up from $5.47 billion in 2020, according to market tracker Mordor Intelligence. The Indian government has pledged to have EVs account for 30 percent of private vehicles by 2030. With the world's second-largest population after China, India is regarded as a promising market for EV manufacturers in the long term.
Automakers are moving quickly to capitalize on opportunities in the Indian EV market. A Reuters report stated that Hyundai Motor has taken part in the bidding for incentives to build a $2.4-billion EV battery facility there, along with local firms.
The Indian government is seeking to set up a facility storing 50 gigawatt-hours of batteries over the next five years. The report stated that India is also seeking the participation of Korean companies such as Samsung and LG Energy Solution in investments.
Hyundai Motor is preparing to secure a foothold in India's EV market. The automaker last month unveiled plans to pour 620 billion won into R&D in the world's fifth-largest economy to launch six EV models in the market by 2028.
Mercedes-Benz said that it will manufacture its EQS series ― the EV version of its flagship S-Class sedan ― in India and start selling the vehicle by the fourth quarter of this year. The German premium automaker will become the first global carmaker to assemble EVs in India. Mercedes was also the first global automaker to launch an EV model in the Indian market, with its EQC electric sports utility vehicle.
Tesla is also seeking to enter India, but has struggled amid differences with the government there. CEO Elon Musk stated on Twitter last week that the company is "working through a lot of challenges" with the Indian government. These challenges are known to include differences over high import duties, which amount up to 100 percent.
Tesla is known to be seeking to start with selling imported vehicles in the market, and then set up a production plant there if it is successful with its imports. Lowering import duties is a key task for Tesla if it wants to compete with the low-cost models of local carmakers. The Indian government wants Tesla to build a factory there.
India's EV charging infrastructure needs substantial improvements to be able to reach its goal of EVs hitting 30-percent market penetration by 2030. High EV battery prices are also seen as a stumbling block in accelerating the transition. Prices remain high, as the EV batteries are imported. The Indian government is seeking to set up battery production facilities there to secure lower-cost batteries.
