Hyundai Motor and Kia signed a memorandum of understanding on Monday with India’s Exide Energy Solutions Ltd to supply batteries for their electric vehicles, aiming to boost competitiveness in the world’s third largest auto market.
Lithium-iron-phosphate Cells
The South Korean automaker said in a statement that their collaboration with Exide Energy, a unit of Exide Industries, aims to localise EV battery production in India, with a focus on lithium-iron-phosphate (LFP) cells.
Hyundai and Kia plan to expand in India, one of their four largest revenue-generating markets alongside the United States, South Korea, and Western Europe.
Hyundai has announced plans to invest approximately 3.25 trillion won ($2.40 billion) in the Indian market over a ten-year period beginning in 2023, including the launch of six EV models by 2028 and charging stations.
Kia intends to introduce locally optimised small-sized EVs beginning in 2025, according to a statement issued Wednesday.
Exide Energy intends to produce EV battery cells by the end of this year. Automakers such as Tesla and VinFast are looking to build EV production facilities in India.
“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.
Hyundai Motor and Kia’s shares closed 3.1% and 3.3% higher, respectively, compared to the benchmark KOSPI’s 0.1% rise. Exide Industries stock rose as much as 15% to a record high.
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