Kia set to mark its entry into India's EV race even as Musk keeps haggling with Indian government

Automaker Kia is launching its first electric car EV6 in India today, marking the South Korean company's entry into the country's electric vehicle race.

Kia India opened bookings for EV6 in the country on May 26. The model can be booked exclusively through select dealerships across 12 cities or on the website of Kia India.

Only 100 units of the model that comes as a Completely Built Unit (CBU) would be available in the country this year.

EV6 not only marks Kia’s entry into India’s EV transition journey, it also reiterates the auto maker's intention to grow its roots deeper inside the country even as its global rival for electric vehicles Tesla struggles to make its way to the Indian market.

"The Indian automotive industry is transforming, and Kia is at the forefront of this transformation. Time and again, we have proven it through our world-class products and services that cater to not just to the unmet but also the unfelt needs of Indians. The introduction of EV6 in the country reiterates the same," Kia India Managing Director and CEO Tae-Jin Park said while announcing the commencement of the bookings.

In the global market, Kia and its parent Hyundai seem to be on an aggressive strategy to reach a head-to-head competition with Tesla with the EV6 model already being termed as “the most convincing rival” of the vehicles produced by the market leader. But it may be long before Kia and Hyundai catch up.

 

However, In India, Kia may have taken a lead already with Tesla’s plans to enter the market still looking uncertain and the former emerging as a favourite among car buyers in the country in a short time.

Kia had entered the Indian market in 2019 with “a vision to win the hearts of the young car buyers” with a manufacturing facility in Andhra Pradesh’s Anantapur District.

Well, it was quite quick in “winning hearts” as the company’s spot-on strategy had led it to become profitable in just the second year, one of the fastest auto companies to do so. This, despite India’s highly competitive passenger vehicle market.

In fact, in 2020, when the domestic market saw its worst performance in a decade, Kia managed to produce over 1,00,000 vehicles and reported a revenue of Rs 10,838 crore.

Kia’s perfect success recipe in a market that is very hard to crack can be attributed to a number of things it has done right starting from its product strategy to the portfolio it has built in but the primary reason is its nice-looking vehicles packed with technologically advanced features available at affordable rates — ticking all boxes for most Indian buyers. The result? The company is among the top 5 automakers in India in terms of sales in just 2.5 years and has already gained a market share of 6 percent in the period.

Kia India, in fact, is the fastest auto company to hit one, two and three lakh domestic sales with the automaker recently registering a cumulative sales — domestic and export — figure of 5 lakh units.

 

Tesla, on the other hand, has likely put its plans of entering the Indian market on hold, failing to convince the government to reduce duty.

According to a Reuters report published this month, “Tesla has put on hold plans to sell electric cars in India, abandoned a search for showroom space and reassigned some of its domestic team after failing to secure lower import taxes”.

It added, citing sources, that when the Modi government did not offer a concession, Tesla put on hold the plans to import cars into India.

Former Mission Director of Niti Aayog Anil Srivatava believes India's EV market will not be strong enough without Tesla. "The reason is that Tesla is not (just about) a car. It comes with the whole infrastructure including the charger, public charging facilities they create," Srivatava told CNBCTV18.com.

"I have seen a lot of EVs in India but I have not seen any charging station which can actually create a market acceptance. If a company like Tesla comes, it will drive the whole ecosystem whereas the players like Tata and Kia are vehicle-focused," he said.

Srivatava is of the view that Tesla will enter the Indian market though with a delay.

In an interview with CNBC-TV18, Minister of Road Transport and Highways of India Nitin Gadkari, last month had reiterated that Tesla can’t sell its cars in India if it doesn’t manufacture in the country.

While Tesla CEO Elon Musk wants the government to reduce import duties to enter the Indian market, the government’s stance has been very clear on not allowing it on those terms.

Meanwhile, with top Indian auto makers like Maruti Suzuki and Mahindra’s delayed focus on building EV portfolio also leaves room for Kia to emerge as one of the front-runners in India’s electric vehicle story.