South Korean car major Hyundai Motor India Ltd that set the cat among pigeons last year by launching the Kona electric SUV for Rs 25 lakh is planning to disrupt the nascent electric car market again by bringing in a more affordable electric model for less than Rs 10 lakh within the next 3 years.
The company said while the increase in import duties on electric cars that are assembled here has come as a surprise, it will not shy away from launching more products. It said the market was still not right for launching more cars immediately as the ecosystem for charging as well as local production of e-vehicle parts was not developed yet but it hoped the market would be ready over the next three years.
"I can say that the changes in taxation for EVs in the budget is not so much positive for us but we are clear that we will absorb the price increase and not pass it on to the consumers. The idea of launching the Kona was not to sell in large numbers but to showcase technology that EVs are fun to drive and easy to live with. To that extent I think it has done its job," said S S Kim, managing director and CEO, HMIL.
In its bid to nudge manufacturers to produce more in India rather than rely on imports from China, the Indian government in its budget presented last Saturday increased import duty on completely built electric bus and trucks from 25 to 40 per cent, on semi-knocked down units of bus, trucks and two wheelers from 15 per cent to 25 per cent and on passenger vehicles and three-wheelers from 15 per cent to 30 per cent. On completely knocked down units of all EVs, duty was hiked from 10 per cent to 15 per cent.
"Kona is not strictly a CKD (completely knocked down unit) as we manufacture some parts in the country as well. But we will localise more to the extent possible which will help us in managing the increase in cost as well," Kim said.
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After the launch of Kona, the electric vehicle landscape in India has intensified with the launch of MG Motor's ZS EV at less than Rs 20 lakh and more recently Tata launching the electric version of its compact SUV Nexon at less than Rs 15 lakh. At the Auto Expo, Mahindra launched an electric version of its compact SUV, KUV1OO, targeted at the fleet segment which qualifies for the FAME 2 subsidies at Rs 8.25 lakh.
"We sold 300 units of the Kona last year and our target is to sell about 500 units this year. It is clear that in times to come the EV space will get crowded but even then in terms of overall volume it will just be about 1 percent of industry sales. That is not very significant. But we want to bring in an affordable, mass market electric car within the next two-three years. We are working on it," he added.
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