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South Korean automotive majors Hyundai Motor Company and Kia Corporation on Monday announced a partnership with Exide Energy Solutions (EESL), a subsidiary of Kolkata-based battery manufacturer Exide Industries, to localise electric vehicle (EV) battery production in India.
As part of their EV initiatives for the Indian market, Hyundai and Kia plan to focus on the production of lithium iron phosphate cells. This strategic alliance will position them the frontrunners in integrating domestically produced batteries into their future EV models for the Indian market, Hyundai said in a statement from Seoul.
“India is a key market for vehicle electrification, particularly due to the government’s carbon neutrality goals, which makes securing cost competitiveness through localised battery production crucial,” said Heui Won Yang, president and head of Hyundai Motor and Kia’s research and development division.
“Through this global partnership, we will gain a competitive advantage by equipping Hyundai Motor and Kia’s future EV models in the Indian market with locally produced batteries,” Yang said.
Shares of Exide Industries hit a 52-week high on Monday, ending day’s trade on BSE at Rs 377 apiece, up 17.2 per cent.
Exide Industries told the stock exchanges that both companies would collaborate on the development, production, and supply of battery cells for Hyundai’s EVs targeted for the Indian market. “EESL is setting-up its multi-giga lithium-ion battery manufacturing facility at Bengaluru, Karnataka, and it is in the process of meeting several potential customers for strategic cooperation in the Indian EV market. The non-binding pact entered by EESL is a step towards this effort,” the company said on Monday.
When contacted, a Hyundai Motor India spokesperson declined to comment on when the sourcing of battery cells might begin and whether the partnership would expand globally.
Established in 2022, Exide Energy Solutions Ltd ventured into manufacturing lithium-Ion cells, modules, and packs, offering a diverse portfolio of chemistries and form factors. Exide Industries, a leading lead acid battery manufacturer in India with over 75 years of experience, had said in August 2023 it was setting up a greenfield lithium-ion cell manufacturing facility in Bengaluru.
Commercial production for the first phase, with a capacity of 6 gigawatt hours (GWh) out of a total 12 GWh, is expected to begin by the end of FY25. The first phase, requiring an investment of around Rs 4,000 crore, is part of a total project cost of Rs 6,000 crore to be financed through internal accruals and bridge loans.
Exide Energy Private Ltd (EEPL) makes the Nexcharge brand, supplying lithium-ion battery modules and packs in Gujarat. In Exide’s annual general meeting last year, its Managing Director and Chief Executive Officer Subir Chakraborty had said that EESL and EEPL would merge, but the Gujarat plant would operate as a satellite unit of EESL. Subsequent to Sanction of Merger Scheme by NCLT Kolkata on March 6, EEPL merged with EESL with effect from 28th March 2024.
Exide has a long-term technical partnership with SVOLT Energy Technology, a Chinese firm, for the lithium-ion cells project.
In November, Hyundai announced a Rs 700 crore investment in a battery assembly plant in Chennai, with a first-phase capacity of 75,000 battery packs annually by 2025.
The lithium-ion battery sector in India is gaining momentum. Agartas Energy Storage Solutions, a Tata group subsidiary, is setting up a lithium-ion cell plant with a 20 GWh annual capacity in Sanand, Gujarat, for an investment of Rs 13,000 crore. JSW Group has partnered with the Odisha government to establish integrated EVs and 50 GWh battery manufacturing facilities with a Rs 40,000 crore investment in the state.
However, India will continue to depend heavily on cell imports for light vehicles. According to S&P Global, only 13 per cent of the total battery cells required to power light vehicles by 2030 will be produced in the country. India, however, makes battery packs now.
