South Korean automakers Kia and its parent company, Hyundai, have signed a memorandum of understanding with India’s Exide Energy Solutions Ltd, to bolster their presence in the electric vehicle (EV) market within the world’s third-largest auto market.
In a joint statement released on Monday, the South Korean automotive giants outlined their partnership with Exide Energy, a subsidiary of Exide Industries Ltd, with the primary objective of localizing EV battery production in India, specifically focusing on lithium-iron-phosphate (LFP) cells.
Hyundai and Kia are eyeing expansion opportunities in India, which stands as one of their top four revenue-generating markets alongside the United States, South Korea, and Western Europe. Hyundai has disclosed plans to invest approximately 3.25 trillion won (Rs. 717,046,902,600) over the next decade, starting from 2023, with a focus on launching six EV models by 2028 and establishing charging stations across the country. Additionally, Kia intends to introduce locally optimized small-sized EVs starting in 2025, as stated in Wednesday’s statement.
Exide Energy is gearing up to commence EV battery cell production by the end of this year, showcasing the rapid progress in establishing the necessary infrastructure for EV manufacturing in India.
With players like Tesla and VinFast also eyeing India for their EV production facilities, the country’s advantageous manufacturing landscape, characterized by lower labor costs compared to China and abundant lithium resources, is increasingly attracting attention from global automakers.
Commenting on the development, Shin Yoon-chul, an analyst at Kiwoom Securities, highlighted India’s potential as an attractive destination for EV manufacturing, citing favorable manufacturing labor costs and abundant lithium reserves as key factors.
Following the announcement, shares of Hyundai Motor and Kia Corp surged by 3.1% and 3.3%, respectively, outperforming the benchmark KOSPI’s modest 0.1% increase. Meanwhile, shares of Exide Industries soared by as much as 15% to reach a record high, reflecting investor optimism surrounding the collaboration’s prospects in India’s burgeoning EV market.