In what comes as a breather for the companies, the Competition Commission of India (CCI) has approved South Korean automobile giant Hyundai and its affiliate Kia Motors’ $300 Mn investment in Ola Electric and its parent company ANI Technologies.
The statutory body, on October 30, tweeted regarding the same. The deal was officially struck in March, 2019 and it allows the companies to collaborate to build India-specific electric vehicles (EV) and infrastructure.
However, getting the CCI approval was the real task here. When the application was initially sent to CCI for approval, the statutory body asked ANI Technologies to define “competitive landscape” for EV and their use in cab-hailing services.
Media reports suggest that CCI was concerned that the entry of the big players like Hyundai and Kia Motors in the cab-hailing space might be unfair to the competition. To ensure it did not hamper other players in the domain, CCI asked ANI Technologies to define the market of electric mobility in cab-hailing services.
However, ANI Technologies failed to do so on time and its application for clearance became invalid. ANI Technologies had to submit another application in September 2019, along with the competition landscape report.
The second report gave a clearer picture of the competitive market, which also included the market for manufacture and sale of passenger cars in India, the market for operational leasing services, the market for radio taxi services, and the market for charging infrastructure services for EVs.
Over time the deal between Hyundai-Kia and ANI Technologies has also changed. Initially, Hyundai and Kia wanted to invest $300 Mn in Ola’s parent company ANI Technologies to support its EV initiatives. But the documentation filed in September 2019 reveals that the South Korean companies will be investing $250 in ANI Technologies and $50Mn in Ola Electric Mobility.
Hyundai Plans To Develop EVs For India
In July, Hyundai had committed to invest $200 Mn for its electric vehicle project to develop affordable electric vehicle (EV), under the ‘Smart EV’ platform. Through this, the company wants to launch a range of EVs in the emerging market in the country.
Moreover, the South Korean Automobile maker has also committed to introducing a special designed EV into Ola’s electric mobility fleet by 2021. The company reportedly believes that EVs will gain more traction in commercial use, compared to personal use.
Hyundai is also focusing on private buyers by partnering up with South Korean Namyang R&D Centre to assess their requirements and roll out an affordable EV.