South Korean automobile giants Hyundai Motor and Kia Corporation on Monday entered into a partnership with Indian battery supplier Exide Industries to equip their future electric vehicles with locally produced batteries. Hyundai and Kia signed a Memorandum of Understanding with Exide at a ceremony that took place at Hyundai Motor Group’s Namyang Research and Development Center in South Korea.
“Through this global partnership with Exide Energy Solutions Ltd., we will gain a competitive advantage by equipping Hyundai Motor and Kia’s future EV models in the Indian market with locally produced batteries,” said Heui Won Yang, President and Head of Hyundai Motor and Kia’s R&D Division.
With the partnership, Hyundai Motor and Kia aim to localize their EV battery production, specifically focusing on lithium-iron-phosphate, or LFP, cells. This move will enhance Hyundai and Kia’s competitiveness in the Indian market, currently the world’s third-largest for automobiles.
According to a Reuters report, Hyundai has outlined plans to invest $2.4 billion over the next decade in the Indian market. This investment includes launching six electric vehicle models and establishing charging infrastructure by 2028. Kia, on the other hand, intends to introduce locally-optimized, small-sized electric vehicles starting as early as next year.
Meanwhile, several factors can be attributed to the growing importance of India in the EV landscape. The country boasts significantly lower manufacturing labor costs compared to China, making it an attractive production hub. Additionally, India’s vast lithium reserves offer a readily available source of a key battery material for EV manufacturers.
By leveraging locally produced batteries, the South Korean automakers aim to become frontrunners in offering electric vehicles built with a significant amount of Indian-made components. This also aligns with the government of India’s push for carbon neutrality. Shares of Exide Industries surged by 13% following the partnership announcement, while that of Hyundai Motor and Kia Corp also closed higher on Monday.
