Hyundai India's Slow EV Sales Cast Doubt on Green Goals

Greenpeace report exposes Hyundai, Kia's slow EV adoption, SUV sales in India as barriers to climate commitment A new report by Greenpeace East Asia, released on January 14, pointed out that Hyundai and Kia have a tough time meeting their climate commitments, particularly in India, where the adoption of electric vehicles is slow and gasoline-powered SUVs are gaining traction. While the companies have made strides in reducing tailpipe emissions, two companies, Hyundai and Kia Motors Corp., saw their own emissions increase in at least seven other regions, including India, the world's third-largest auto market. Hyundai and Kia managed to decrease their per vehicle emissions across the European and South Korean markets from 2018 through 2023. But, as far as establishing itself in the sales of EVs, the effort, according to Greenpeace, is still woefully lacking while potential demand would not have made the effort irrelevant. The company's focus on the sales of bigger, polluting gasoline-engine vehicles-the likes of which SUVs-start pulling it even further from decarbonization goals. Hyundai and Kia's Indian Market Share Hyundai and Kia jointly account for the second-largest share in India and happen to be the fourth-largest market in the world. Both companies are investing significantly in the country, and Hyundai will open its new plant by September. While doing so, the report attacks the fact that the companies could not do any "meager electrification" efforts in India when it added multiple options in the SUVs portfolio. Hyundai currently has six SUV models in India, out of which only one is electric. The competitor of Hyundai, the market leader, Maruti Suzuki, has the same number of SUVs, but the share of sales of SUVs in its overall sales is only two-fifths, while for Hyundai, the SUVs constitute two-thirds of its overall sales in India. This stands in sharp contrast to global trends that increasingly prefer EV adoption and sustainable transportation. Sustainability Efforts of Hyundai and Kia Hyundai and Kia have developed advanced platforms such as the Integrated Greenhouse Gas Information System that tracks and minimizes emissions from the vehicle throughout its life cycle. The company can therefore track the consumption of energy and carbon emissions through its production facilities and suppliers, using the LCA methodology, and then assess and manage its footprint on the environment. However, the report from Greenpeace says that what the companies are doing within India does not match their claims of sustainability. They have indeed been able to control emissions with IGIS, but the fact that they are not worried much about EVs in India and still promise gasoline vehicles does not make sense in their public climate commitments. This leads to questions of whether companies will meet their decarbonization targets, especially in growth markets such as India, as the automotive sector continues to emit increasing levels of carbon emissions. Electrification of Vehicle in India In fact, the past few years have seen India's EV market explode, selling more than 2 million units in 2024, which translates to a growth of 24% from the last year. With this, Electric Vehicles now make up 8% of total sales, compared with 6.8% of the total number of vehicles sold in 2023, according to JMK Research. On the other hand, electric vehicle sales were a bit positive. The segment of electric automobiles suffered a downside in September 2024 as sales declined as much as 8%. According to the Federation of Automobile Dealers Associations report, India's EV Market leader Tata Motor suffered a sales decline. This is in evidence through dwindling sales which conclude that leading EV manufacturers in India are still battling struggles about managing growth on a stable scale as barriers of infrastructure and policy for mass adoptions are still working. Disconnecting Goals and Market Strategy The report by Greenpeace is replete with very important questions concerning what will happen about Hyundai and Kia's strategies with regards to carbon footprint. The heavy reliance of India on petrol-guzzling SUVs, and slow growth of electric cars, mirrors the larger global industry trend: Automakers have proven reluctant to swerve from well-established, traditionally powered internal-combustion engine (ICE) vehicles for electric versions, even though countries are fast phasing in, or in a few cases banning them. Challenges in the Indian market for electric vehicles include that it is costly, there is a limited structure for charging, and consumers suffer from range anxiety. More importantly, SUV sales emit more carbon than the smaller ones. Such sales are still going up, which will make it tough to achieve the climate targets. The vehicles only happen to be the most popular in the Indian automotive landscape, and so far as companies like Hyundai and Kia keep the former on the priority list, it would remain very hard to decarbonize these. Prospects Ahead As India rapidly develops into one of the world's biggest automobile markets, Hyundai and Kia would face rebalancing of strategies addressing clean and sustainable modes of transport in that region. Low uptake for electric vehicles, besides persistent pressure for gasoline power SUVs indicate aggressive measures taken to address commitment on the environmental issue. Indian Prime Minister has promised to make aggressive targets for adoption of electric vehicles. The Indian government has fixed a target, and by 2030, 30% of the total sale of vehicles in India should be of electric vehicles. Hyundai and Kia would have to double their investment in electric vehicles, improve charging infrastructure, and work closely with policymakers to overcome barriers created for the adoption of such vehicles. Time alone will tell whether Hyundai and Kia adjust their strategies with a sense of urgency the climate crisis and growing concern for sustainability in the automobile industry bring. After all, there is mounting pressure globally toward climate goals.