Hyundai Motor India Limited (HMIL) is set to make a significant impact on the Indian electric vehicle (EV) market, projecting a “strong and steady” growth trajectory until 2030. This optimistic outlook comes from HMIL’s Managing Director Unsoo Kim, who highlighted India’s early-stage electrification and emphasized the critical role of government support in driving the sector’s expansion.
Despite a recent dip in EV sales in India, Hyundai remains confident about the future. According to data from the Federation of Automobile Dealers Associations (FADA), September saw a year-on-year decline of 8%, with 5,874 EV units sold. Nevertheless, Kim believes that India’s EV growth is far from hitting a plateau, pointing to the government’s robust policies and investments by major companies, which he says will drive demand for EVs in the coming years.
Creta EV: A High-Volume Game Change
Among Hyundai’s anticipated EV launches, the upcoming Creta EV is set to redefine the company’s standing in the Indian market. HMIL’s Chief Operating Officer, Tarun Garg, announced that this high-volume EV will be available in the last quarter of the current financial year, and he described it as a “game changer” for the EV segment.
“Creta is a very strong brand,” said Garg. “When we launched it in 2015, India’s market was dominated by hatchbacks, and SUVs made up only about 13% of car sales. Today, SUVs represent about 60% of sales. We believe the Creta EV will similarly transform India’s EV segment, as it gives consumers confidence that EVs are the way forward.”
The Creta EV will be part of a broader strategy, as HMIL prepares to launch four new electric models in the coming years, signaling Hyundai’s commitment to strengthening India’s EV ecosystem.
IPO: Hyundai India’s Record-Breaking Move
In a parallel development, HMIL has announced plans for India’s largest-ever Initial Public Offering (IPO), seeking to raise INR 27,780 crore (around USD 3.3 billion). Scheduled between October 15 and 17, the IPO comprises an Offer for Sale (OFS) of 14.2 crore shares, through which Hyundai Motor Corporation (HMC) will dilute its stake in HMIL from 100% to 82.5%.
HMC also has plans to reduce its stake further to 75% in the coming years, in compliance with regulatory mandates. This IPO launch reflects Hyundai’s growing focus on the Indian market, with the funds likely to fuel expansion in EV production and innovation.
Long-Term Plans with Royalty Stability
During the pre-IPO meeting, HMIL’s Chief Financial Officer Wangdo Hur assured investors about Hyundai’s royalty policy, announcing that the current 3.5% royalty outgo to HMC will remain unchanged “for a long period.” This commitment aligns with Organisation for Economic Co-operation and Development (OECD) transfer pricing guidelines, which mandate that transactions between related entities, such as royalty payments, follow arm’s length principles to ensure fair pricing. Hur’s statements aim to boost investor confidence, ensuring a stable royalty rate for the foreseeable future.
India’s EV Market: Challenges and Opportunities
Hyundai’s ambitious plans coincide with a challenging period for the Indian EV market, which has witnessed a sales slowdown despite surging investments and government subsidies, including production-linked incentives (PLIs). Hyundai’s COO Garg noted that India’s EV penetration remains low compared to the global market, implying that there is substantial growth potential.
“We are still at a low level of electrification. There is only one way — up,” Garg said, underscoring the scope for expansion as more consumers adapt to electric vehicles.
Hyundai’s bullish outlook on India’s EV market aligns with broader industry expectations, where government initiatives, technological advancements, and consumer acceptance play pivotal roles. With plans for new launches, record IPO funding, and a commitment to royalty stability, Hyundai is gearing up to make India a global EV hub.
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