Hyundai Motor and Kia signed a memorandum of understanding with Exide Energy Solutions on Monday to provide batteries for his or her electrical automobiles within the newest try by carmakers to entrench themselves in India.

The South Korean sister corporations mentioned they intention to localize their EV battery manufacturing with a give attention to lithium-iron-phosphate cells (LFP), which have a series of benefits over lithium-ion batteries. LFP batteries are cheaper to supply, have an extended lifespan, and have a decrease danger of bursting into flames than alternate options. But they carry about 30% much less power than similar-sized lithium-nickel-cobalt-aluminum-oxide batteries.

The manufacturers added that the partnership with Exide Energy Solutions, a subsidiary of Exide Industries, will place them as pioneers in utilizing domestically produced batteries. India is the world’s third-largest auto market, behind the U.S. and China.

“India is a key market for vehicle electrification due in part to the government’s carbon neutrality goals, which makes securing cost competitiveness through localized battery production crucial,” Heui Won Yang, the top of analysis and growth for Hyundai and Kia, mentioned in an announcement.

Hyundai Motor Group, the father or mother firm of each Hyundai and Kia, instructed Reuters final month that it’s going to invest 68 trillion Korean won ($51 billion) over three years in South Korea to spice up EV manufacturing and its mobility enterprise. Last yr, the automaker mentioned it might invest 3.25 trillion won ($2.40 billion) over a 10-year interval within the Indian state of Tamil Nadu, also referred to as the “Detroit of Asia.”

Kia plans to launch three EVs within the Indian market, together with the Carens compact EV and the EV9 SUV. At the model’s CEO Investor Day in Seoul, Kia CEO Ho Sung Song mentioned the EV9 will enter India this yr, according to Express Drives. He added that the corporate will launch two region-specific EVs in rising markets, similar to India.

Hyundai goals to introduce 5 EV fashions in India by 2032 — along with the Kona and Ioniq electrical SUVs — and add extra charging stations.

EV makers hone in on India

Foreign automakers — specifically Elon Musk’s Tesla — acquired a significant increase final month after India’s federal authorities lowered import taxes on certain imported EVs. The authorities would require corporations to decide to investing not less than $500 million and start home manufacturing inside three years. That makes them eligible to import as much as 8,000 EVs that price $35,000 or extra every year at a 15% tax price, down from 70% and even 100%.

India’s Ministry of Commerce and Industry mentioned the brand new coverage would “boost the Make in India initiative” and “strengthen the EV ecosystem by promoting healthy competition among EV players.”

Tesla had been lobbying New Delhi for years to lower import taxes on EVs, however local manufacturers opposed any modifications. Musk has frequently cited high import taxes as the principle motive Tesla hasn’t accomplished a lot enterprise within the nation, though he has repeatedly reaffirmed his curiosity.

“India is now the most populous country in the world… and it should have electric cars, just like every other country,” Musk said during an X Spaces event on Monday. “It’s a natural progression to provide Tesla EVs in India.”

VinFast, which briefly became the third-most valuable carmaker on this planet final yr, needs to build a $2 billion EV plant in India. The Vietnamese firm has reportedly lobbied India to scale back import duties on its automobiles for 2 years.

BYD, China’s largest EV maker and rival to Tesla, proposed a three way partnership with Indian agency Megha Engineering and Infrastructures final yr. But it was shelved after Indian authorities officers raised issues.