Amidst all the hype surrounding the launch of India’s first-ever long-range electric SUV, the Hyundai Kona came with a bit of a shocker — a price-tag of Rs 25.3 lakh. At first glance, it was quite evident why the electric SUV was so pricey: an imported lithium ion battery.
But this factor aside, a number of other reasons contribute to Kona’s 2.5-million-rupee price tag. For a start, the car’s overall localisation number is negligible, which means hardly any of the car’s components are sourced or made locally.
“Even though we have tried to localise as much as possible, it hasn’t worked. When we contact suppliers, they aren’t positive about setting up capacities to collaborate with Hyundai as far as Kona is concerned,” said Ganesh Mani, Senior Vice President (Production), Hyundai Motor India Limited. “This is due to the car’s small volume and low demand. This means that as on date, there is a very limited number of components that we are localising — plastic components, sheets and certain mechanical components, to name a few. But we have plans to add more to this list.”
Kona is best described as a product comprising of many parts, the majority of which are imported. The company is currently mulling over the possibility of having its suppliers for Hyundai Creta and Hyundai Venue supply components for Kona, as early as possible. “We have not set any targets for the localisation of Kona. But as and when demand goes up, localisation will also go up,” said Mani.
Hyundai is on record, stating that it doesn’t plan to revise the price of the Kona, given its niche status and the present-day pricing of lithium ion batteries. The company also has plans to develop a new mass-market electric car in the next three or four years, which means it is comfortable letting the Kona remain a niche product. So, a company-driven price cut for the moment, does not seem likely.
However, a couple of factors could bring down Kona’s price nevertheless: cheaper, locally sourced lithium ion batteries, which Hyundai says it’s working on. “We are trying to find local partners to source lithium ion batteries,” said Seon Seob Kim, Managing Director, Hyundai Motor India. “It's still at an early stage, but we are trying to understand our partners' capabilities and communicating with them.”
The next GST Council Meet, which could take up the issue of tax-cuts surrounding EV infrastructure, could also have an impact on the pricing of the Kona. For now, however, Hyundai is happy selling its electric SUV at a price of Rs 2.5 million.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Punjab Lok Sabha elections: Complete list of Congress candidates
May 18, 2024 4:08 PM
Punjab Lok Sabha elections: Check full list of AAP candidates and constituencies
May 18, 2024 12:59 PM
PM Modi, Rahul Gandhi election rallies in Delhi today: Here are the routes to avoid
May 18, 2024 11:28 AM