Kia India doesn’t expect hybrid incentives, bets on flexible strategy: CEO Gwanggu Lee

“In India, it’s very dangerous if we just stick to one direction because it’s such a dynamic country," said Lee in an interview. “The policy environment here is constantly changing, and OEMs need to adapt swiftly to new developments."

Kia, a global automotive player with access to a broad range of technologies, is hedging its bets on multiple fronts, from electric vehicles (EVs) to hybrids and even compressed natural gas (CNG) models. However, Lee is wary of regulatory unpredictability, which complicates long-term investment strategies.

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“As a businessman, it’s very hard to know which direction to follow when the policy winds shift," he said. “Dynamic policy sounds great but can be a huge risk for us. A more predictable direction would be more favourable."

No expectations for hybrid incentives

While Kia is open to expanding its hybrid portfolio, the company isn’t banking on government incentives to make it viable. India currently does not offer tax breaks for hybrid vehicles, unlike EVs, which enjoy reduced GST rates. Despite this, Lee remains pragmatic about the economics of hybrids.

“Even if we invest in hybrids, I don’t expect incentives," he stated. “Hybrid technology is fundamentally based on the same platform as internal combustion engines (ICEs). The real benefit lies in fuel efficiency and customer affordability, rather than breaks."

Electrification as a central pillar

Kia has already committed to launching two mass-market EVs in India next year, including an electric version of the Syros compact SUV it unveiled on Thursday, as part of its broader electrification strategy. However, Lee is cautious about the pace of EV adoption, given the government’s evolving targets.

“At the beginning of this year, experts told me EV penetration could reach 30%, but a few months later, the expectation dropped to 17%," he said.

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Kia’s electrification efforts will also be key to its adherence to Corporate Average Fuel Economy (CAFE) norms and stricter carbon emissions regulations.

The SUV-driven growth story

Kia India expects to increase its SUV market share to 10% next year from about 7%, as it gains incremental volumes from the Syros SUV and the market sees a rebound with increased government spending, Hardeep Singh Brar, head, sales and marketing, Kia India said.

Lee said that the segment's growth potential is driven by rising incomes and an expanding middle class.

“India’s car industry grows in line with economic development," he said. “The key is the emergence of new middle-class households, which will support car market growth."

CNG and beyond

While EVs and hybrids dominate the green mobility discourse, Kia is also exploring other options like CNG. However, Lee indicated that its application might be limited to smaller SUVs and passenger cars. For the segments that it operates in, it may choose to focus on EVs and self-charging hybrids.

“CNG is a potential avenue, but it doesn’t support the performance requirements of larger SUVs," he said. “We are focused on ensuring no compromises in performance, especially for our SUV offerings."

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“Kia’s global presence gives us access to a wide range of technologies," Lee said. “The key is timing—knowing when to adapt and bring these technologies to the Indian market."