With the upcoming hike in import duties, Hyundai plans to localise development of EV components and produce a mass-market EV for the country in 2-3 years
In a bid to encourage manufacturers to increase the number of electric vehicles produced in the country, the government is set to hike the custom duties on completely built unit (CBU), as well as completely knocked down (CKD) EVs, and their components. Hence, importing electric vehicles will become more expensive which will force manufacturers to shift to local procurement of components.
The import duty on CKD electric vehicles is presently set at 10%, which will be hiked to 15%, from April this year. Also, the duty on imported battery cells will increase from 5% to 10% from April 2021. In a bid to avoid putting the heavy import charge on the buyers, Hyundai Motor India Ltd has decided to localise more components than it currently does under the government’s Make in India movement.
SS Kim, Managing Director, Hyundai Motor India Ltd said that the company is already locally producing some plastic and interior parts of the Kona, Hyundai’s first and only fully electric vehicle currently on sale in India. Hyundai plans to localise about 90% of EV parts and components, which is identical to what it does with conventional ICE cars in the country.
Hence, the Korean manufacturer will be looking for multiple partnerships in order to reach that goal, making EVs more affordable and accessible to a wider group of buyers. While talking to ETAuto in an interview, Mr Kim also said that the company is also in talks with global battery suppliers like LG Chem, to discuss collaboration for battery cell procurement for India.
On the other hand, Hyundai has also started conducting customer surveys to gauge customer response on topics like how much they’re willing to pay for an EV. Hyundai Motor plans to launch a mass-market EV for the country in a time of two to three years.
The automaker will ready a concept version of the vehicle to be showcased at the next edition of the Auto Expo, which will be held in 2022. As of now, Hyundai only retails one fully electric vehicle in India, the Kona. With an ex-showroom price of Rs 23.8 lakh, the Kona Electric is positioned on the premium side.