South Korea’s Hyundai Motor Co said on Thursday it will invest 200 billion rupees ($2.45 billion) in the southern Indian state of Tamil Nadu over the next 10 years, to beef up electric vehicle production in the world’s most populous country.

Tamil Nadu is a hub for automobile manufacturing with the likes of Ashok Leyland, TVS Motor, Hyundai and Renault-Nissan making thousands of two- and four-wheelers every year.

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 state in the next five years, it said in a statement.

The carmaker’s move comes a few weeks after the federal government said it would raise taxes on imported cars and motorbikes, including electric vehicles (EVs), as it seeks to boost local manufacturing.

India’s EV industry has grown rapidly, with domestic carmakers Tata Motors and Mahindra & Mahindra as well as global rivals BYD and SAIC’s MG Motor lining up launches.

However, the market is still small, accounting for roughly 1% of the total car sales in the country in 2022. The federal government aims to push that number to 30% by 2030 as it looks to reduce pollution and fuel imports.

As of April, Hyundai had a nearly 15% market share in India’s passenger vehicle space, only behind Maruti Suzuki.

Hyundai rivals Nissan Motor and Renault SA in February said they would invest $600 million to fund the development of two electric models and four sport-utility vehicles (SUVs) for sale in India and abroad.

($1 = 81.7800 Indian rupees)

Source : Reuters