EV updates

India’s New EV Policy: A Game Changer for the Passenger Vehicle Market and Auto Component Industry

Published

5 months ago

June 14, 2024

India’s automotive landscape is set for a dramatic shift with the introduction of a new Electric Vehicle (EV) policy. This policy is designed to intensify competition in the electric passenger vehicle (PV) segment and significantly benefit the domestic auto component industry. By lowering import duties and emphasizing localization, the government aims to attract global automotive giants like Tesla and Vinfast, thereby transforming the market dynamics. Analysts have weighed in on the potential impacts, indicating both opportunities and challenges for various stakeholders.

The New EV Policy: Key Highlights

The government’s EV policy is a multifaceted approach to boost the electric vehicle market in India. Here are the core aspects:

Reduced Import Duties:
- Automakers are allowed to import up to 8,000 EVs annually, priced at $35,000 or higher, at a significantly reduced import duty of 15%, down from the previous 70%.
- This concession is contingent upon the automaker committing to invest at least $500 million in local manufacturing over a specified period.
Localization Requirements:
- The policy mandates a 25% domestic value addition (DVA) within the first three years and 50% within five years.
- Companies must provide a bank guarantee to back their investment commitments, ensuring that the reduced import duties are justified by substantial local investment.

Market Penetration Potential:

Considering that India sold 42,000 luxury cars in 2023, the import allowance of 8,000 premium EVs per year at lower duties could lead to a market penetration of approximately 20%.

Implications for the Indian Market

The introduction of the new EV policy has several far-reaching implications for the Indian automotive market. Here’s a detailed look at these potential impacts:

Increased Competition in the EV Segment: The entry of international players such as Tesla and Vinfast is expected to significantly increase competition in the electric PV market. This new wave of competition will challenge domestic OEMs like Mahindra and Tata Motors, pushing them to innovate and improve their offerings. The mid-to-premium EV segment, in particular, is likely to see heightened activity, as these global brands bring in advanced technology and new models that appeal to Indian consumers.

Boost to Local Manufacturing and Auto Components: One of the primary objectives of the policy is to boost local manufacturing. By requiring a substantial investment in local production and setting stringent localization targets, the policy ensures that the benefits of global investments are shared with domestic industries. This focus on localization is expected to create significant opportunities for domestic auto component manufacturers, who will see increased demand for locally produced parts and advanced technology solutions.

Consumer Interest and Market Dynamics: The policy is likely to attract considerable consumer interest, particularly for EVs priced at or below ₹20 lakh. Such vehicles are expected to appeal to a broad segment of the Indian market, driving significant growth in the electric PV segment. However, this increased competition could pose challenges for existing Indian manufacturers, who will need to enhance their value propositions to retain market share.

Expert Opinions on the New Policy

Analysts from various financial services firms have provided their insights into the potential impacts of the new EV policy. Here’s what they have to say:

Emkay Global Financial Services:
- Emkay analysts believe that the policy ushers in a phase of both growth and uncertainty for the PV industry. The increased competition from international players will disrupt the market but also offer opportunities for growth. Domestic manufacturers will need to adapt quickly to remain competitive.
InCred Equities:
- According to InCred analysts, the policy is particularly attractive for new EV makers like Tesla and joint ventures such as Mahindra-Volkswagen. However, it may pose a disadvantage to luxury brands like Mercedes and BMW, which currently import EVs at higher duties. These brands will need to rethink their strategies to compete effectively in the evolving market landscape.
Motilal Oswal Financial Services:
- Motilal Oswal analysts suggest that the policy aims to foster an EV ecosystem and promote local manufacturing while protecting Indian OEMs operating below the $35,000 price point. Nevertheless, the policy could impact the sales of upcoming models from M&M and Tata Motors at the upper end of the SUV market and luxury vehicles from German brands.
Kotak Institutional Equities:
- Kotak analysts believe that the immediate impact on the domestic market will be minimal due to the high price points of imported EVs and the annual import cap. However, the long-term competitive intensity is expected to rise, with domestic players needing to step up their game in the electric vehicle segment to compete with global entrants like Tesla.

The Road Ahead: Challenges and Opportunities

While the new EV policy opens up several opportunities, it also presents challenges that various stakeholders will need to navigate. Here’s a closer look at these aspects:

Opportunities for Growth and Innovation: The policy provides a fertile ground for innovation and growth. Domestic OEMs and auto component manufacturers can leverage the increased focus on localization to develop new technologies and improve production processes. This can lead to the creation of more affordable and efficient EVs, which will further drive market growth.

Challenges for Domestic Manufacturers: Domestic manufacturers will face significant challenges as they compete with well-established global brands. These challenges include the need to invest in new technologies, enhance production capabilities, and improve the overall value proposition of their EV offerings. Companies that can successfully navigate these challenges will emerge stronger and more competitive in the global market.

Potential Impact on Luxury Vehicle Market: The policy could disrupt the luxury vehicle market, particularly for brands that rely heavily on imports. Companies like Mercedes and BMW will need to adapt their strategies, possibly by increasing local production or forming new partnerships to remain competitive. This could lead to a reshaping of the luxury vehicle segment, with a greater focus on locally produced models.

Regulatory and Policy Considerations: The success of the new EV policy will depend on effective implementation and monitoring. Ensuring that companies meet their investment commitments and localization targets will be crucial. Additionally, the government may need to introduce further incentives and support measures to encourage more widespread adoption of EVs.

Conclusion: A Transformative Policy for India’s EV Market

India’s new EV policy represents a bold step towards transforming the electric passenger vehicle market. By attracting global manufacturers, boosting local production, and enhancing competition, the policy has the potential to significantly reshape the automotive landscape. Domestic auto component manufacturers stand to benefit greatly from the increased focus on localization and technological investments.

While challenges remain, particularly for domestic OEMs and luxury vehicle manufacturers, the opportunities for growth and innovation are immense. As the market evolves, stakeholders will need to adapt quickly to capitalize on the new dynamics and drive the growth of India’s EV ecosystem.

The future of India’s EV market looks promising, with the new policy setting the stage for a more competitive, innovative, and sustainable automotive industry. As global and domestic players gear up for this new era, consumers can look forward to a broader range of electric vehicle options, improved technology, and a more robust market overall.

EV updates

Kia and Hyundai Set to Surpass 100,000 EV Sales by October End

Published

4 weeks ago

October 25, 2024

Admin

Hyundai electric vehicles parked together, highlighting the company's growth in the EV market.

Kia and Hyundai Set to Exceed 100,000 EV Sales

Kia and Hyundai are on track to surpass 100,000 electric vehicle (EV) sales by the end of October. A report from Yonhap News on October 13 revealed that these two South Korean automakers have achieved a significant sales increase of 30.3% compared to last year.

Current Sales Figures

Currently, the companies have reported a total of 91,348 EVs sold. Kia experienced impressive growth, with an 80.3% rise, totaling 43,051 units. Hyundai recorded a more modest increase of 4.5%, selling 48,297 units. Analysts predict that their combined sales will exceed 100,000 by month’s end.

Upcoming IPO and Supply Chain Investments

Hyundai Motor plans to raise ₹27,870 crore through an IPO scheduled for October 15. This move aims to strengthen its position in the EV market. The company seeks to enhance its supply chains for key components like battery packs, powertrains, and battery cells. Investments in charging infrastructure are also a priority.

Ambitious EV Vision

Tarun Garg, Chief Operating Officer of Hyundai Motor India, emphasized the company’s ambitious EV vision. He announced the upcoming launch of the Creta EV, followed by three additional models designed to boost sales further.

Commitment to Electric Mobility

Both companies demonstrate strong commitment to electric mobility, responding to growing consumer demand for EVs. As the automotive landscape shifts toward sustainability, Kia and Hyundai position themselves to capitalize on this trend.

Industry Trends and Future Outlook

The positive sales trajectory aligns with broader industry trends. More consumers show interest in electric vehicles due to their environmental benefits and advancements in technology. Commitment to local supply chains for EV components is expected to enhance production efficiency and reduce costs over time.

A Pivotal Moment in the EV Market

As Kia and Hyundai innovate and expand their electric offerings, their strategies may serve as models for other automakers. Surpassing 100,000 EV sales marks a pivotal moment in their journey to become leaders in the electric vehicle market.

Conclusion

Kia and Hyundai’s efforts to expand their electric vehicle lineup and infrastructure are set to yield positive results. These initiatives will contribute to a greener future and establish a precedent in the automotive industry.

Article By

Prashant Sharma

EV updates

Hyundai Creta EV: The Future of Family SUVs in India

Published

1 month ago

October 23, 2024

Prashant Sharma

Hyundai Motor Company has officially confirmed the launch of the highly anticipated Creta EV, set to arrive in the Indian market in January 2025. This announcement marks an important milestone in Hyundai’s strategy to expand its electric vehicle (EV) lineup, which aims to introduce three additional mass-market EVs by 2027. The Creta EV’s unveiling follows a recent record initial public offering (IPO) that raised $3.3 billion, a move that positions Hyundai for aggressive growth in one of the world’s fastest-growing automotive markets.

Hyundai Creta pc-zeenews

Production for the Creta EV is expected to begin in December 2024 at Hyundai’s manufacturing facility in Chennai, which has been a key contributor to the company’s success in India since 1998. The Creta EV will closely resemble its internal combustion engine (ICE) counterpart, with design modifications that cater specifically to the EV market. These updates include a closed-off front grille with a charging port, new bumpers, and aerodynamic alloy wheels that enhance the vehicle’s overall efficiency.

The interior of the Creta EV will maintain much of the cabin layout found in the standard model, while incorporating modern features. A new steering wheel inspired by Hyundai’s Ioniq 5 will be part of the interior enhancements. The cabin focuses on comfort and functionality, catering to families and their extended culture in India.

Powering the Creta EV will be a 45 kWh battery pack, paired with a front-axle-mounted electric motor. This setup mirrors that of Hyundai’s Kona EV, delivering a robust performance with an output of 136 horsepower and 255 Nm of torque. The electric SUV is projected to offer an impressive driving range of up to 450 kilometers on a single charge, making it a competitive option in the burgeoning EV market.

Hyundai aims to price the Creta EV competitively, keeping it under ₹20 lakh. This strategic

Hyundai Creta pc-zeenews

pricing places the Creta EV in direct competition with popular models like the Tata Curvv EV, MG ZS EV, and the upcoming Maruti Suzuki EVX. By prioritizing affordability, Hyundai seeks to capture a significant share of India’s growing EV market.

Beyond the Creta EV, Hyundai plans to introduce several other electric models in the coming years. Among these is the Inster EV, expected to launch in India by 2026. The Inster will utilize the E-GMP (K) platform, designed specifically for electric vehicles. This model will feature battery packs with capacities of 42 kWh and 49 kWh, offering ranges of up to 300 kilometers and 355 kilometers, respectively.

Hyundai’s upcoming lineup also includes the next-generation Grand i10 Nios EV and the updated Venue EV, both slated for debut between 2026 and 2027. This expansion of Hyundai’s electric vehicle portfolio reflects the company’s commitment to meeting the diverse needs of Indian consumers.

A crucial element of Hyundai’s strategy is a high level of localization in its production processes. This approach is essential for keeping costs down and enabling competitive pricing. By localizing production, Hyundai aims to make electric vehicles more affordable while also aligning its offerings with the preferences of Indian consumers.

The Indian electric vehicle market is experiencing rapid growth, fueled by government incentives promoting EV adoption and increasing environmental awareness. As consumers become more aware of the benefits of electric mobility, Hyundai’s focus on a diverse range of electric vehicles positions the company favorably within this expanding market.

Hyundai recognizes the competitive landscape in the Indian EV sector, facing challenges from established players like Tata Motors and MG, as well as new entrants. Each of these competitors is launching innovative electric models to meet the evolving demands of Indian consumers. To maintain its competitive edge, Hyundai must continue to innovate and deliver high-quality, localized vehicles that resonate with buyers.

Hyundai Creta pc-zeenews

The launch of the Creta EV and other upcoming models signifies a pivotal moment for Hyundai, solidifying its presence in the Indian automotive market. Known for its stylish and reliable vehicles, Hyundai’s transition to electric mobility aligns with changing consumer preferences and environmental concerns.

As the automotive landscape evolves, Hyundai’s commitment to sustainability and innovation will be crucial in shaping its future success. The anticipated launch of the Creta EV in January 2025 has already generated considerable excitement among consumers and automotive enthusiasts alike.

In conclusion, Hyundai’s plan to launch the Creta EV along with additional mass-market electric vehicles highlights its dedication to the Indian market and the increasing demand for sustainable transportation. With a focus on affordability, performance, and innovative design, Hyundai is set to make a significant impact on the Indian electric vehicle landscape. As the company prepares for the arrival of the Creta EV, it is clear that Hyundai is ready to tackle the challenges and opportunities presented by this rapidly evolving sector, ensuring a bright future for electric mobility in India.

Aritcle By
Prashant Sharma

EV updates

Volkswagen’s CMP 21 Platform: The Future of Affordable Electric Cars in India

Published

1 month ago

October 19, 2024

Prashant Sharma

Volkswagen's CMP 21: Affordable EVs for India

Volkswagen is gearing up to launch a fresh lineup of electric vehicles (EVs) in India. The company will use the CMP 21 platform, a more affordable and flexible option. Originally developed in China, this platform is set to help Volkswagen compete with other electric models like the Tata Harrier EV and Hyundai Creta EV.

What is the CMP 21 Platform?

The CMP 21 (China Main Platform) is a versatile structure that supports vehicles ranging from 4.3 to 4.8 meters in length. It allows Volkswagen to produce electric versions of popular models such as the Volkswagen Taigun and Skoda Kushaq. With a focus on affordability and flexibility, Volkswagen aims to tap into the growing demand for electric vehicles in India.

Volkswagen’s Plan for 7-Seater Electric SUVs

In addition to smaller models, Volkswagen is also looking at using the CMP 21 platform to develop a 7-seater electric SUV. This SUV will compete with upcoming larger electric vehicles like the Tata Safari EV and Mahindra XUV.e9. With the market for electric SUVs growing rapidly, Volkswagen wants to ensure it has a strong competitor in this segment.

Why This is Important: By offering a variety of electric SUVs, Volkswagen will appeal to a broader range of customers, from individuals seeking compact models to families needing larger vehicles.

Expanding to Electric MPVs

Volkswagen is also exploring the possibility of creating an electric MPV (Multi-Purpose Vehicle) using the CMP 21 platform. This would allow the company to expand its product lineup further and compete across different segments. Given the diverse needs of Indian consumers, offering a range of electric vehicles is crucial for market success.

Overcoming Previous Challenges

Volkswagen has faced challenges in its EV journey. The company previously worked on a project known as the PEAK EV, but the project was canceled due to high costs. Instead of continuing with that costly approach, Volkswagen decided to shift focus to the more affordable CMP 21 platform, which aligns better with Indian market needs.

Expected Features of the CMP 21 Platform

Although specific details about the CMP 21 platform are not fully disclosed, some key features are expected. The platform will likely offer rear-wheel drive as the standard option, with an all-wheel drive option provided through dual motors. This flexibility gives Volkswagen the opportunity to offer both budget-friendly and performance-focused models.

Battery Capacity and Flexibility

One of the major strengths of the CMP 21 platform is its ability to support a wide range of battery sizes, from 40kWh to 80kWh. This flexibility allows Volkswagen to cater to different customer preferences. For city driving, customers can choose smaller batteries, while those needing longer range for highway trips can opt for larger batteries.

Why This Matters: Battery options are crucial in the EV market. Offering varied capacities ensures Volkswagen can attract a wider audience.

Passenger Space and Comfort

Volkswagen is expected to offer spacious interiors in its CMP 21-based vehicles. The platform is anticipated to have a wheelbase of around 2,771mm, similar to Volkswagen’s existing ID.4 model. This will ensure that even the smaller vehicles built on this platform provide ample room for passengers. In India, where comfort and practicality are top priorities, this feature will be a major selling point.

Launch Timeline for Volkswagen’s Electric SUV

Volkswagen plans to launch its first CMP 21-based electric SUV in India by mid-2027. The company is confident that this new lineup of affordable electric vehicles will be well-received in the Indian market. With a few years to refine its product, Volkswagen expects the CMP 21-based EVs to meet the demands of Indian consumers.

Why India’s EV Market is Key for Volkswagen

India’s electric vehicle market is growing rapidly. Both domestic and international automakers are racing to release new models. Volkswagen, with its flexible and cost-effective CMP 21 platform, is positioning itself as a key player in this space. By offering affordable yet high-quality EVs, Volkswagen aims to capture a significant portion of the market.

What’s Next: The company’s shift to the CMP 21 platform, combined with its decision to abandon the expensive PEAK EV project, shows a clear commitment to making EVs accessible to a broader audience.

Government Support for EV Adoption

The Indian government is pushing for increased electric vehicle adoption by offering incentives and developing infrastructure. Automakers like Volkswagen are well-positioned to benefit from these policies. With the expected release of its first CMP 21-based SUV in 2027, Volkswagen is poised to make a significant impact on the Indian EV market.

Aritcle By
Prashant Sharma