The Korean tech manufacturer raised concerns about localisation rules like PLI for automotive technology ahead of its million-dollar initial public offering.
Before its million-dollar IPO, Hyundai expressed concerns about the government’s ‘frequent’ policy changes, warning that it could affect the country’s investment inflows and technological progress.
The automotive manufacturer intends to raise Rs 25,000 crore (equivalent to $325 million) in India by selling a 17% stake in its local unit through the stock market. A recent draft submitted to the Security and Exchange Board of India (SEBI) highlighted the importance of stability in government schemes for smooth technology transition and localisation.
Hyundai plans to invest an additional Rs 32,000 crore ($416M) in India in the coming years, focusing on launching electric vehicles, developing green technology infrastructure, and increasing production capacity. The company emphasised its commitment to localise electric vehicle manufacturing for the mass market.
The draft applauded policies like product-linked incentive (PLI) schemes for automotive technology and advanced cell chemistry, phased manufacturing programs, and Make in India concerning India’s EV sector in the draft prospectus.
It also acknowledged that while localisation aims to reduce import reliance and manufacturing costs, it necessitates significant initial investments from industry stakeholders.
However, it expressed concerns about the complexities of meeting eligibility criteria and accessing benefits despite government schemes offering subsidies and import duty advantages. It called for simplified policies and improved monitoring to ease localisation in India.
According to Hyundai, streamlining policies and enhancing transparency will facilitate increased localisation efforts within the country. They believe advancing vendors associated with individual Original Equipment Manufacturers (OEMs) could shift the industry’s risk profile by enhancing supply-side reliability.
Since beginning operations in 1996, the company has invested nearly Rs 30,000 crore ($390M) in the Indian automobile sector.
The company plans to boost the cost-effectiveness of its electric vehicle models by concentrating on developing domestic manufacturing capacities for key components. This effort encompasses cells, battery packs, power electronics, drivetrains, and establishing a localised EV supply chain.
