Hyundai Motor India is strategically shifting towards hybrid electric vehicles (HEVs) to create a cleaner and more diverse portfolio. This move comes as the company aims to increase its presence in the Indian market while also addressing the growing demand for eco-friendly vehicles.

Strategic Shift to Hybrids

Hyundai's decision to focus on hybrid vehicles represents a shift from its initial strategy, which primarily focused on battery electric vehicles (BEVs). This change is motivated by several factors, including the slow adoption of EVs due to high prices and insufficient charging infrastructure. By introducing HEVs, Hyundai aims to bridge the gap between traditional internal combustion engine (ICE) vehicles and full EVs, offering consumers a more accessible and practical option.

Tarun Garg, COO of Hyundai Motor India, has confirmed that the company will roll out eight new models over the next couple of years, which are expected to include hybrids. This marks Hyundai's formal entry into the hybrid powertrain segment. Hyundai plans to launch 26 products by FY2030, including a mix of 20 ICE vehicles and 6 EVs. Additionally, the company will introduce new eco-friendly powertrains like hybrids.

Market Dynamics and Competition

Hyundai faces increasing competition from domestic automakers such as Tata Motors and Mahindra & Mahindra, both of which have made significant strides in the SUV and EV segments. To maintain its market position, Hyundai is adopting an aggressive product launch strategy. This includes new models, full model changes, and product enhancements across various segments and price points.

Unsoo Kim, MD & CEO of Hyundai Motor India, stated that these strategic launch plans demonstrate the company's commitment to innovation, the Indian market, and delivering sustained value to customers. The company's goal is to reinforce its brand appeal, deepen customer engagement, and address the recent decline in market share.

Future Plans and Investments

Hyundai intends to launch its first hybrid cars in India as early as 2026. The company is evaluating a hybrid sport-utility vehicle (SUV) similar in size to its top-selling Creta SUV. Both Hyundai and Kia are targeting the launch of hybrid SUVs in 2026 or 2027, while also continuing with their EV plans for India.

Hyundai has committed to a capital expenditure of Rs 7,000 crore during FY26. A significant portion of this investment (40%) will be allocated to expanding manufacturing in Pune, while 25% will be dedicated to enhancing the product portfolio. The company is also targeting a 7-8% growth in exports.

EV Strategy and Localization

Hyundai is also committed to expanding its EV lineup. The company intends to launch three new electric models and ramp up the supporting infrastructure in the next few years. Hyundai plans to localize the manufacturing of key EV components, including battery packs, electric drivetrains, and electronic components, which is considered vital for price competitiveness.

Hyundai's electrification strategy began with the launch of the Kona Electric, followed by the Ioniq 5. The company has now introduced its first locally manufactured mass-market EV, the Creta EV. With around 92% localization on the Creta EV, Hyundai aims to offer advanced technology, a premium design, and safety features at a balanced price point.

Challenges and Opportunities

While Hyundai is making significant investments in EVs and hybrids, the company acknowledges that EV penetration in India remains low, at around 2.5%. The demand for EVs heavily depends on government policies, charging infrastructure, and customer acceptance. Hyundai is actively working with stakeholders to improve charging accessibility in India.

Despite the challenges, Hyundai is optimistic about the future of electric mobility in India. The company anticipates that EV penetration could grow to around 12-13% by 2030, driven by supportive policies and growing participation from key players in the automotive industry.