autoX Awards 2023: Cost of EVs Has to Come Down for Mass Adoption, Says Tarun Garg, COO, Hyundai India

What kind of impact has the Ioniq 5 had on the market?

When we launched the Ioniq 5, it was a big statement – because it was so well awarded and is far ahead of its time. Frankly, when we launched it, we were wondering whether we would sell 300 to 500 cars a year, but I’m happy to say now that we’ve already sold more than 950 vehicles. It’s been a big change in the way people look at electric cars.

Is your EV roadmap on track?

Hyundai has already announced that we’re going to invest ₹20,000 Crore, and most of that will be towards the localisation of battery packs – because, if we want mass adoption of EVs, the cost has to come down and a critical component of that is the battery. So, we’re very committed to this cause. When such a big transformation is happening, the whole idea is to not lose focus and to keep investing. We have to create a greener, cleaner environment for future generations – so there’s a much larger cause here. One of my favourite statements is: ‘Sustainability is never self-sustainable.’ You need to really invest in sustainability to make it sustainable! In India, in fact, the race towards EVs has accelerated much faster than we anticipated. So, I think we’re headed in the right direction.

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Hyundai was very early to recognise the aspirational needs of the Indian customer. But how have you seen these aspirations change in the last decade?

Amazingly. In fact, when the Creta was launched in 2015, SUVs used to contribute 13% to the industry’s sales. Today, you see that number has already reached 49%. SUVs are already at 60% in our portfolio. So, we’ve always believed in creating the market. This shows a very growth-oriented mindset. When you see an open space, an area of unstated demand, that’s where the real value pools are – and that’s what we’ve always tried to do.

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Today, from a customer aspiration point of view, style, design, and features have become much more important, as has convenience. 33% of our cars sold are with BluLink connectivity. So, people want a connected car, plus they want a sunroof, which is a highly aspirational feature. People want ventilated seats and, of course, six airbags as standard. If I look at my career of the last 30 years, it was all about fuel efficiency, price, and functionality. Now it’s all about whether I see the car as an extension of myself, and will it protect me and my family, and will it help me feel as though I’ve arrived in life? I think these are the factors that are driving sales today.

Looking at 2024, there’s a lot of geopolitical volatility and uncertainty going into next year. How do you see that playing out?

I think there are definitely concerns. But, whenever we try to forecast, we tend to be very conservative. You should remember, in Covid, we all predicted doom and gloom but we saw good growth. Even beginning 2023, we forecasted maybe 3.5 to 5% growth, and here we are with 8.5 to 9% growth from January to October. Maybe, we’ll end this year at about 7.5 to 8%. So, India has shown a lot of resilience. The geopolitical concerns are increasing, and we also have to take into account that the base is going up. 2022 saw the highest sales in the car industry, and yet in 2023 we will see growth.

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So, even if we continue to grow by single digits, we shouldn’t really be disturbed. With 2022 as the base year, if you see the CAGR of the last 5 years, it’s in the range of 3.5% – as is the CAGR of the last 10 years. So, I don’t think we should say that unless we grow by 8 or 9%, we have done badly. I think India as a country is doing much better than the global economy. We are a young population, and car penetration is much lower. I’m very happy about the GST collections. There are a lot of positives. Yes, 2024 would have its challenges, but we should remain positive.