Auto industry has to be 'well balanced' on EV investments: Kia India CEO

Indicating that Kia's current focus remains on the electric car market, he mentioned that the company's first mass-market electric car-scheduled to be launched next year-will be a mid-sized SUV

The global auto industry, including that of India, is facing a “very difficult" choice between investing in electric, hybrid, or internal combustion engine (ICE) cars and must be “very careful” and “well balanced” in its approach, said Gwanggu Lee, CEO and MD of Kia India, on Thursday. 

Lee, in an interview to Business Standard on Thursday, said that while the strong hybrid car sales have seen sizable growth in India in the last few months as compared to electric cars, it remains to be seen if this trend will continue. 

He gave the example of the European car market where the electric car sales have gone down, forcing certain major carmakers there to incur losses, suffer share price decrease, and change their product portfolio strategy. “We (industry) are in a very difficult situation amid 100 years of automobile history. So, we have to be very careful and well balanced,” he said.

 

Indicating that Kia’s current focus remains on the electric car market, he mentioned that the company’s first mass market electric car -- which is scheduled to be launched next year -- is going to be a mid-sized sports utility vehicle (SUV). 

Kia’s current electric car portfolio in the country is in the premium range (Rs 60 lakhs plus). When asked what price range the company is considering to launch the mass market electric car in, he replied, “It has not been decided yet. However, it will definitely not be in the range of EV6 and EV9. It will truly be a mass market product.”

EV6, which was launched in 2022, is sold at a starting price of Rs 60.96 lakhs. Kia on Thursday launched EV9 and Carnival facelift at a starting price of Rs 1.299 crore and Rs 63.9 lakhs, respectively. All are ex-showroom prices.

About the Indian market, Lee mentioned that if the hybrid car demand in the country increases even further, the company is open to launching a strong hybrid car in India.

“Yes, we will do that. But are you ready to say there is no need for electrification in India? We have limited resources. We can either continue to invest in electrification or in the hybrid car segment. If the hybrid car segment cannot guarantee returns, it is not easy to take the decision,” he stated.

“Globally, we have various hybrid models. Our hybrid car sales outside of India are very high. However, we have to see that if we bring one of these models to India, will this trend (of high hybrid car sales growth) continue or will the electrification (or growth in electric car sales) be the big wave in India as bringing a new technology to India would need new investments,” he said.

He mentioned that the customers right now have many concerns regarding the electric cars and its technology.

“For example, people say that an electric car has fewer parts than an ICE (internal combustion engine) car. That is true. But then, what about the battery? What if the customer has to change the battery for some reason and what will be the cost of that? What is the right resale price of an electric car that is five years old? If an electric car customer has such concerns in his mind, it will be very difficult (to grow). It will take time,” he explained.

The company’s volume sales this year are expected to remain at the same level as last year, Lee mentioned. “The output portfolio (car models) got aged. So, it is time to gradually introduce new products (including facelifts). Then the sales will jump to the next level,” he added.

He said Kia’s India supply chain will not be really affected due to the recent conflict in West Asia.

“Our localisation is almost around 80 per cent. Only 20 per cent of the parts are coming through the global supply chain. Therefore, the Indian operations of our company are unlikely to be badly impacted due to this matter,” he mentioned.