A first for industry: Hyundai may ink pacts for direct power purchase

In a first for a car company in India, Hyundai Motor India Ltd (HMIL) may sign direct power-purchase agreements to procure electricity, both conventional and renewable, from power generators or through the grid to boost its charging infrastructure for electric vehicles (EVs) in the country.

Such direct contracts will assist the carmaker in getting cheap power.

Companies usually rely on discoms for electricity supply at relatively high commercial rates. HMIL, which has EV-charging points at its 34 dealerships, is planning to do sizeable investment in its charging infrastructure, sources said.

Lack of sufficient EV-charging points is a major factor hampering the growth of EVs in India. The South Korean carmaker, which is planning to launch six EVs in India by 2028, had on August 8 this year amended its Articles of Association (AoA) to include the aforementioned points regarding direct electricity procurement.

Business Standard has reviewed the revised AoA. HMIL did not respond to queries sent by the newspaper.

In its revised AoA, the company said it planned to “invest in electric charging infrastructure, develop revenue models, enter into all types of contracts, agreements including but not limited to consultancy services, development of software, procurement of electricity either from the grid or through non-renewable sources etc”.

Green as well as non-green power producers sell electricity in the open market “grid”.

HMIL sells one EV —  Kona Electric — in India. The company is expected to launch a second EV —Ioniq 5 — for the Indian market in a few months, sources said. EV sales are seeing huge growth amid the Central government’s push for greener vehicles.

According to the Federation of Automobile Dealers Asso­ciations (FADA), 18,142 EVs were sold in the first half of FY23 against 4,932 units in the corresponding period of FY22.

HMIL is a small player in the Indian EV market, which is dominated by Tata Motors. HMIL sold 309 EVs (Kona Electric) in India during the first half of FY23 as compared to Tata Motors, which sold 15,518 in the same period, according to FADA. In terms of domestic car sales, HMIL was number two in September. According to the FADA, the South Korean carmaker sold 39,118 cars in India last month. Maruti Suzuki was at number one with 103,912.

In a statement on May 17, Tata Power had said it had signed a memorandum of understanding (MoU) with HMIL to set up fast chargers (DC 60 kW) at the latter’s existing 34 EV dealer locations in 29 cities along with the supply, installation, and commissioning of home charging for the car company’s EV customers.

However, the statement did not mention anything about any power-purchase agreement between HMIL and Tata Power. “Currently, all 34 HMIL dealer locations are equipped with AC 7.2 kW chargers, and the company aims to expand the fast-charging infra network across its pan-Indian dealerships. This new partnership will be of tremendous benefit to customers as the vehicle-charging time of a DC 60 kW charger is much less than the AC 7.2 kW charger. DC 60 kW charging stations will enhance custo­mer convenience,” Tata Power had said in its statement.

Under the tie-up, the charging stations at HMIL dealers will be open for EV owners of all firms, it had said. “Also, end-to-end charging solutions at the home of HMIL’s EV owners will be offered by Tata Power for their convenience resulting in hassle-free EV ownership,” Tata Power had added.