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Hyundai to invest Rs 20,000 crore in Tamil Nadu for making Electric Vehicles

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South Korean auto giant Hyundai Motor said on Thursday that  it will invest Rs 20,000 crore in Tamil Nadu over the next 10 years to expand the production of electric vehicles in India.

Hyundai, through its Indian subsidiary Hyundai Motor India, will also set up a battery pack assembly unit with an annual capacity of 178,000 units and install 100 EV charging stations across the southern state in the next five years, it said in a statement.

The company plans to increase the production volume at its factory near Chennai to 850,000 vehicles per year from roughly 775,000 currently. However, the car maker did not disclose a timeline to achieve the target.

Hyundai also expects a jump in its export volumes to 319,000 vehicles by 2032, from 181,000 in 2022 Chennai has already emerged as an auto manufacturing hub in the country as other companies such as Ashok Leyland, Renault-Nissan, TVS Motor and Royal Enfield also have factories in and around the city.

Hyundai is also developing a local vendor base for EV parts instead of importing them, as the government’s production incentive scheme is applicable only when manufacturing is done within the country, Puneet Anand, a senior executive for corporate affairs, said in a news conference.

India’s nascent EV industry is making rapid strides as other companies such as Tata Motors and Mahindra & Mahindra  have started producing electric vehicles.

Hyundai is lining up five new EV launches in India, targeting a 20% share by 2032.

However, India’s EV market is still small, accounting for barely 1% of the country’s total car sales in 2022. The government aims to expand the share to 30% by 2030 as part of its fight against climate change and has been offering various incentives to manufacturers to scale up production of EVs.