Hyundai Motor Company plans to invest INR7bn (US$84m) in India to assemble battery packs for battery electric vehicles (BEVs) to be produced in the country, according to media reports this week.
Local subsidiary, Hyundai Motor India (HMIL) plans to complete construction of the first phase of the plant in Chennai by 2025 with initial capacity for 75,000 battery packs per year.
Hyundai expects local production will help reduce the cost of its BEVs in the country and help lift local demand. The company has targeted increasing its share of the BEV market from 2% now to 22% by 2030 as part of its global growth ambitions.
Earlier this year, the company said it aimed to sell 2m BEVs per year worldwide by 2030, helped by the launch of 17 new models: 11 Hyundais and six Genesis.
Demand for BEVs in India is expanding rapidly, albeit from a low level. Total sales were estimated to have quadrupled to 48,000 units last year in a market of 4.3million new vehicles.
Major cities such as Delhi are struggling with high air pollution levels and are beginning to set ambitious BEV sales targets.
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Hyundai has two vehicle assembly plants in India, both near Chennai in Tamil Nadu state. The company produced 644,000 vehicles in the first nine months of 2023; 510,000 for local sale and 134,000 exports.
The plants are operating at full capacity. In September, the company finalised a deal to take over General Motors‘ unused vehicle manufacturing plant in Talegaon, Maharashtra, which would increase its annual production capacity to 1m units from 820,000 now.
Earlier this year, the automaker said its also plans to invest US$2.5bn in India by the end of the decade to expand capacity at its existing sites and install a BEV charging network.