New Delhi: Kia Motors India Pvt. Ltd, a wholly owned subsidiary of Hyundai Motor Corp. of South Korea, is likely to participate in bids to supply electric vehicles (EVs) to the government once its manufacturing unit is commissioned in the Anantapur district of Andhra Pradesh.
Kia’s management has already studied the possibility of launching EVs in India, and the firm may also introduce an electric power train with its second or third product in India by 2021, a person with direct knowledge of the development said.
Kia Motors India has already announced its plans to enter India with a compact utility vehicle, the SP Concept, which was showcased at the Auto Expo in February.
However, the company will introduce electric cars in India only if it is satisfied with the government direction for electric and sustainable mobility, including infrastructure for charging stations.
“Kia Motors has the intent of introducing EVs in India and participate in the bids to supply these vehicles to the Union government as soon as the plant starts production. It will also depend on the kind of direction the government gives regarding specifications of the vehicles and the infrastructure available. Kia has technologies required for electrified vehicles like hybrids, plug-in hybrids and electric vehicles," said the person cited above, requesting anonymity.
In the recently concluded Delhi Auto Expo, the company exhibited its electric cars Soul and Niro. The firm has a 5-6% share in the global market for electric vehicles.
“Kia Motors is one of the global leaders in the electric vehicles category. Depending on specifications and infrastructure that are shared, we could take part in the bids to supply EVs," said Manohar Bhat, head of marketing and sales at Kia Motors India, said in response to an email query.
Energy Efficiency Services Ltd (EESL), a state-run company promoted by the ministry of power, floated a fresh tender for 10,000 vehicles on 9 March to be used by central government officials. An initial tender of 500 vehicles was won by Tata Motors Ltd and Mahindra and Mahindra Ltd last year.
According to a report in The Economic Times, Saurabh Kumar, managing director of EESL said the company is expecting more car makers like Hyundai Motor India Ltd and Kia Motors India Ltd to bid in the second tender since both the have already showcased their electric vehicles.
“The electric vehicles manufactured by Kia Motors are way superior to the ones that are being delivered now. A Soul or Niro can run 200km in a single charge. So, the requisite specifications should be improved by the government, and then one should look at cost competitiveness (price at which EESL would acquire the vehicles; the lowest bidder gets 50% of the total order)," added the person cited above.
Kia Motors India’s manufacturing capacity in India will have an annual capacity of 300,000 units and the company plans to exhaust the capacity in the next 3-4 years.
The company aspires to become the third or the fourth largest car maker (overall) in India within three to four years of unveiling its first product in the market.
Kia Motors will not compete with Maruti Suzuki India Ltd or Hyundai in the mini or small hatchback segment. The company is the process of finalizing its product strategy and the second and third product may be a utility vehicle or premium hatchback.
According to the person mentioned above, Kia Motors India may also look to introduce an alternative power train—mostly electric—besides diesel and petrol for its second and third product that will be launched by 2021.
“Kia Motors portfolio includes hybrid, plug-in hybrid, electric and fuel cell technology globally; therefore depending on the market situation and readiness of infrastructure, we could launch the appropriate power train," added Bhat.
The company will look at alternative ways for introducing its offerings in the electric vehicle space as well other than participating in the bid to supply such vehicles to the government.
The department of heavy industries on its part has been working on a draft proposal for the second phase of the FAME [Faster Adoption and Manufacturing of (Hybrid&) Electric Vehicles in India] scheme, while some of the other ministries are also in the process of forming guidelines in their respective domains pertaining to electric mobility.
“It is a good platform for any new player to start its electric vehicle journey in the domestic market. By participating in the bids, one would understand how to competitively meet price specifications mentioned by the government. It is also an opportunity to work and develop the supply chain ecosystem for such vehicles. It provides a good platform to the companies to understand which way the market is moving," said Sridhar V., partner at Grant Thornton India.