SEOUL (Reuters) – Hyundai Motor (OTC:) Co and Kia Corp on Monday signed a memorandum of understanding with India’s Exide Energy Solutions Ltd on battery production for their electric vehicles (EVs) in India.
The South Korean auto duo said in a statement that their partnership with Exide Energy, a subsidiary of Exide Industries Ltd , aims to localise their EV battery production in India, specifically focusing on lithium-iron-phosphate (LFP) cells.
Hyundai Motor said it plans to invest about 3.25 trillion won ($2.40 billion) for 10 years starting 2023, including for the launch of six EV models by 2028 and charging stations, betting big on the world’s third-largest auto market.
Kia plans to introduce locally optimised small-sized EVs for the Indian market starting 2025, the statement said.
Analysts noted that India’s rich natural resources needed for EV supply chains, including lithium, as well as affordable labour costs are attracting automakers to consider producing EVs in the country.
“India’s average manufacturing labour cost is estimated to be about one-fourth of labour cost in China, and the country’s massive lithium mines would help automakers that plan to make EVs in the country to better source necessary battery materials,” said Shin Yoon-chul, an analyst at Kiwoom Securities.
Shares of Hyundai Motor and Kia Corp were trading up 4.0% and 4.2%, respectively, as of 0519 GMT, versus the benchmark ‘s 0.4% rise.
($1 = 1,352.9100 won)
