India's manufacturing costs and South Korea's technological capabilities could provide an alternative to China's position in the global electric vehicle (EV) industry, according to Hyundai Motor India Managing Director and CEO Tarun Garg.

Speaking at the EV Conclave 2026 in New Delhi organised by a local media outlet, Garg said China's position in the EV market was largely driven by competitive pricing, while India and South Korea had complementary capabilities.

"Which country offers the closest in terms of cost? Probably India. Then, which country offers the closest in terms of technology, especially in the EV space, maybe Korea?" Garg said during a panel discussion on scaling India's EV market.

Combining South Korea's technological expertise with India's manufacturing base and supplier network could help Hyundai compete with other manufacturers and reduce dependence on China for critical EV components. The company is preparing to introduce a mass-market electric SUV in India while increasing local production of power electronics and charging systems.

Localisation to strengthen EV competitiveness

Localisation is central to Hyundai's strategy to expand its EV business and reduce import dependence. Garg said the company had localised battery packs and was preparing to introduce domestically produced power electronics and integrated charging control units (ICCUs) before its upcoming EV launch. However, battery cell localisation has taken longer than planned.

The upcoming compact electric SUV will initially use battery cells supplied by China's Svolt before transitioning to locally produced cells from Exide Industries. Garg previously said Hyundai had secured alternative supplies to avoid delaying the vehicle programme after Exide's cell production timeline was postponed.

At the Bayon launch on October 26th, Garg said Hyundai sourced approximately 83% of its components locally at the Tier-1 supplier level and aimed to increase this proportion to 92% by 2032. This target covers the broader vehicle portfolio and is separate from EV localisation. Hyundai also plans to increase localisation beyond Tier-1 suppliers, although domestic sourcing of raw materials and certain critical components remains challenging.

Hyundai's EV supply chain readiness

Garg said Hyundai expected to meet demand for its upcoming mass-market electric SUV, citing Hyundai Motor Group's global manufacturing and sourcing operations. Globally sourced components provide economies of scale, while greater localisation could improve domestic supply availability.

"So many things are globally sourced, and that gives us scale. So that's a huge advantage," he said, referring to the group's global supply network.

He said finished-component shortages could be addressed through localisation and production planning, while raw material constraints could remain an industry-wide challenge. "I am pretty confident about managing the supply chain," he said.

Hyundai's first India-focused mass-market compact electric SUV is expected to compete with models from Tata Motors, Mahindra and other manufacturers. According to the company's August 2026 CEO Investor Day announcement, the SUV will be designed and localised for India, featuring a next-generation infotainment system and Level 2 driver assistance technology.

Garg expects the model to increase Hyundai's EV penetration and bring its electric vehicle sales mix closer to the industry average.

"We are being more aggressive. We believe that the new car, the kind of product which we are going to launch will really bring us much, much closer to the industry averages of EVs," he said.

According to the Federation of Automobile Dealers Associations (FADA), EVs accounted for 8.45% of India's passenger vehicle retail sales in September 2026, compared with 5.74% a year earlier. Electric passenger vehicle retail sales nearly doubled to 36,108 units during the month.

Rising costs could affect EV affordability

Garg said rising raw material costs and uncertainty over government incentives could put pressure on vehicle prices. "My worry also is that what will happen if the raw material prices continue to go up," he said.

He also questioned the effect of discontinuing production-linked incentives (PLI) on EV pricing. "Say PLI stops in March 28. What would that do to the pricing of the EV cars?" he said.

According to the Ministry of Heavy Industries, the automotive PLI scheme provides incentives for eligible sales through FY2026-27, with disbursements continuing into FY2027-28. It supports domestic manufacturing of advanced automotive technology vehicles and components rather than providing direct purchase subsidies to consumers. Automakers therefore face the challenge of managing higher input costs and increasing domestic manufacturing while expanding EV adoption.

EV buyers moving beyond range and running costs

Garg expects consumer priorities to evolve as the electric passenger vehicle market develops, with design, driving experience and technology becoming more important in purchasing decisions.

He compared this shift with developments in India's conventional passenger vehicle market, where customers initially prioritised spare parts availability, vehicle prices and fuel efficiency before placing greater emphasis on design, performance, technology and connectivity.

According to Garg, range and other basic EV attributes are likely to become standard expectations rather than primary differentiators. He said the entry of more manufacturers and electric models could accelerate this change and increase demand.

"Customers have clearly moved from charging anxiety or range anxiety to the reliability of the charging infrastructure," Garg said.

He cited Hyundai's network of 186 DC fast-charging stations and the myHyundai application, which he said provides access to approximately 38,000 charging points across India. The application is available to EV owners across brands. Garg said cross-brand access could support wider EV adoption and that automakers needed to cooperate in expanding public charging infrastructure rather than focus exclusively on their own customers.

India's manufacturing and export role

Garg said India's production costs, manufacturing capabilities and relative geopolitical stability supported its role as a manufacturing and export base.

Exports accounted for approximately 25% of Hyundai India's production in the previous year, up from around 20% five years earlier. The company aims to increase this proportion to 30%.

Hyundai India recently crossed four million cumulative passenger vehicle exports, a milestone announced alongside the inauguration of its Pune manufacturing plant earlier this month. Hyundai Motor Group has announced an investment plan of US$ 15.5 billion in India between 2026 and 2032, covering manufacturing expansion, research and development, local supplier development and future mobility technologies.

Garg said trade agreements could help Hyundai India expand beyond existing export markets into regions such as Europe and Australia. He added that India's production costs and manufacturing quality were relevant to its role in Hyundai's global manufacturing network.

"In addition to the cost, India also gives a quality which is matching, you know, any global benchmark," he said.

Hyundai's existing brand recognition, manufacturing capacity and international distribution network could support export growth as India assumes a larger role in the group's global production strategy.