India's first electric SUV is finally here! The Hyundai Kona Electric has been launched at a price of ₹ 25.30 lakh (ex-showroom, pan India), and is a one-of-its-kind in the country. That really makes it special, but it is priced at a premium when you consider that the Kona is a sibling to the Hyundai Creta. In fact, the Kona Electric is about a shade smaller than the Creta, while sporting a slightly longer wheelbase. The Creta between ₹ 9.99 lakh and ₹ 15.65 lakh (ex-showroom, Delhi). There's a difference of nearly ₹ 10 lakh between the two models. So why does it cost ₹ 25.30 lakh for an SUV that small? Here's a breakdown on what makes this electric SUV a premium offering.
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The Hyundai Kona is positioned as a compact SUV for developed markets, whereas the Hyundai Creta is placed as an offering for emerging markets. India now gets both SUVs, but the Kona is only sold in the electric avatar here. The key takeaway is the fact that it gets an electric powertrain and that makes all the difference. Electric technology itself is expensive and there's no surprise that the acquisition cost on an EV will be more, compared to a standard fossil fuelled counterpart. The Kona EV is also built on an all-new platform that makes it more expensive to manufacture than the Creta. With the platform shared with the petrol version, the car uses over 52 per cent of Advanced High Strength Steel (AHSS) in its construction with the components hot stamped.
Also Read: Hyundai Kona Electric India Review
Furthermore, the Hyundai Kona Electric is loaded to the gills on the feature front with LED headlamps and taillights, 17-inch alloys, electric sunroof, HUD, touchscreen infotainment system, electric parking brake, ventilated seats, 10-way adjustable driver's seat, leather upholstery, multiple driving modes and more. With respect to safety, the car comes with six airbags, ABS with EBD, VSC, VSM, HAC,TPMS, all disc brakes and more as part of the standard safety kit. While all of those features are certainly welcome, they drive up the cost. That said, for the premium you are paying on this EV, the features certainly add more value.
Also Read: Hyundai Kona Electric Review
The other big reason is the fact that the Hyundai Kona Electric is locally assembled in India and not completely manufactured like the Creta. The EV comes as a Completely Knocked Down (CKD) kit. Hyundai won't share just yet what percentage of local content actually goes into the Kona, but the car and the battery are locally assembled at the company's Chennai-based facility. A CKD model commands a customs duty of 30 per cent, which does help the automaker save on costs when you consider that a CBU import would attract a 60 per cent duty (for cars with a CIF value below $40,000).
This has also helped Hyundai keep the prices competitive on the Kona Electric in India. In the US, the Kona Electric is priced between $36,950 and $44,900 (approx. ₹ 25 lakh and to 30.78 lakh). In its home market South Korea, the e-SUV is priced at 48,500,000 won (appox. ₹ 28.14 lakh) after tax benefits. In the EV friendly European markets like Norway, the Kona Electric is priced at 335,900 kroner (approx. ₹ 26.62 lakh). Of course, most of these markets do get the higher-spec 201 bhp version of the Kona Electric with the 64 kWh battery. The India-spec model in comparison gets the lower spec 131 bhp, 39.2 kWh battery, but the pricing does come close to the other markets. We also get a single, fully loaded version ensuring more value for the price tag.
CKD imports do result in big cost savings over a fully built import, and that has majorly helped Hyundai India offset costs on the Kona Electric, which in turn is passed on to the customer. However, the lithium-ion batteries still remain a major component that needs to be sourced internationally considering India still does not have a battery production facility. That's a massive cost and adds up to the overall asking price of the electric SUV.
Yes, a more reasonable cost will help Hyundai India sell more units of the Kona Electric. But the company is quite clear about where the SUV is positioned. The automaker aims to sell about 500 units in a year, which isn't a high number but then the Kona Electric isn't a high volumes model either. Not yet at least! But if it does manage to meet the company's estimated sales, the model will pave way for other car makers to bring more electric vehicles in India. It does help that the Kona Electric has a range of 452 km (ARAI certified), killing that range anxiety.
What we need then are more incentives for buyers adopting electric vehicles. The recommended GST reduction in the Union Budget 2019 comes as a big push to the cause, but it will also benefit if the early buyers are offered incentives on the purchase of EVs to further encourage customers to make the transition. The Kona Electric does pave the way in many ways, and one can only expect more electric choices landing in the market soon.