In a significant strategic pivot, Hyundai Motor Group, encompassing Hyundai Motor and Kia, is gearing up to introduce its first hybrid vehicles in India by 2026. This decision marks a shift from the group’s initial focus on purely electric vehicles (EVs), as it aims to strengthen its foothold in one of the world’s fastest-growing auto markets.
The Move Towards Hybrids
Hyundai and Kia, currently the second-largest carmakers in India, are set to launch a hybrid sport-utility vehicle (SUV) comparable in size to their popular mid-sized Creta SUV. Sources familiar with the plan have indicated that both companies are targeting a 2026 or 2027 release for these hybrid models, while still maintaining their commitment to their EV agendas.
In an official statement to Reuters, Hyundai Motor Group reaffirmed its dedication to “a future of electrified mobility,” highlighting the need to tailor product strategies to specific markets. The pivot to hybrids, which combine a gasoline engine with an electric motor, comes in response to rising consumer interest and sales of hybrid technology in India. This shift is seen as a practical interim strategy while the market and infrastructure for EVs continue to develop.
Market Dynamics and Consumer Trends
Currently, Hyundai and Kia offer only gasoline, diesel, and imported EVs like the IONIQ 5 and EV6 in India. Despite their efforts to introduce India-made EVs by 2025, EV adoption has been sluggish due to high prices and limited charging infrastructure. These challenges have led the automakers to explore hybrids as a more immediately viable option.
Hyundai is leveraging its existing hybrid technology, already successful in other markets, to develop models tailored to Indian consumers. This decision is fueled by a noticeable increase in demand and acceptance of hybrids in recent months. As of 2023, total car sales in India surpassed 4 million, with EVs accounting for just over 2%, while hybrids, primarily driven by Toyota Motor, are approaching a similar market share.
Strategic Investment in India
Hyundai’s renewed focus on the Indian market is underscored by its plans for a $3 billion Initial Public Offering (IPO). This move comes amidst a broader reallocation of resources, following reduced operations in China and the sale of its two Russian plants. India now stands as Hyundai’s third-largest revenue market, following South Korea and the United States.
Hyundai Motor Group’s Executive Chair, Euisun Chung, has been actively involved in these strategic discussions, having visited India twice in less than a year. These visits emphasize the company’s long-term commitment to expanding its presence in the Indian market through both EVs and hybrids.
Final Word
Hyundai’s strategic shift towards hybrid technology in India represents a pragmatic response to current market conditions and consumer preferences. By balancing its EV ambitions with the immediate viability of hybrids, Hyundai aims to solidify its position in India’s burgeoning automotive market. This move not only caters to present-day consumer demands but also sets the stage for a more electrified future in one of the world’s largest car markets.