Hyundai Motor has divested its entire stake in Ola Electric, while fellow South Korean carmaker Kia has reduced its holding in the EV startup. The combined share sale netted approximately ₹6.89 billion ($80 million), news agency Reuters reported.
According to exchange data released on Tuesday, Hyundai, which previously held a 2.47 per cent stake, sold its shares at ₹50.70 each. Kia offloaded 0.6 per cent of its stake at ₹50.55 per share. Kia originally held less than a 1 per cent stake, and its current holding remains undisclosed as the exchange data does not reveal stakes below 1 per cent.
The disposals weighed on Ola Electric’s share price, which fell by 8 per cent on Tuesday. Both sales were priced at nearly a 6 per cent discount to Monday’s closing price, contributing to the stock’s decline.
Hyundai and Kia had initially invested $300 million in Ola Electric in 2019, with plans to collaborate on electric vehicle development and charging infrastructure alongside Bhavish Aggarwal’s startup.
Challenges mount for Ola Electric
The divestment comes at a difficult time for Ola Electric. The company has been grappling with slowing sales, regulatory scrutiny, and intensified competition from established two-wheeler manufacturers. Since going public in August 2024, its shares have plunged 46 per cent.
Ola Electric recently reported a wider fourth-quarter loss and forecasted a revenue decline for the first quarter of the current financial year. The company has been offering steep discounts to counter competition, which has further pressured its earnings.
Hyundai forms task force to tackle US tariffs
In April, Hyundai Motor announced the formation of a task force to address the impact of US tariffs. The company also confirmed it had moved some production of its Tucson crossover from Mexico to the United States, Reuters reported.
Additionally, Hyundai is evaluating whether to transfer production of certain US-bound vehicles from South Korea to alternative sites.
Hyundai, along with its affiliate Kia, ranks as the world’s third-largest automaker by sales. The companies face elevated risks from US tariffs given that roughly one-third of their global sales are generated in the US market. Data from Korea Investment & Securities shows that about two-thirds of Hyundai and Kia’s US sales come from imported vehicles.
“We expect a challenging business outlook to continue due to intensifying trade conflicts and other various unpredictable macroeconomic factors,” Hyundai said.
The task force aims to mitigate the financial impact of tariffs and devise strategies for increasing the local sourcing of auto parts within the US.
Investments and relocation amid policy shifts
Hyundai’s move follows its $21 billion investment plan in the US, which includes expanding production at its new factory in Georgia. However, scaling up domestic output could take time, and the tariffs may cost the company billions.
The decision to relocate some Tucson production to Hyundai’s Alabama plant is a modest step forward, with approximately 16,000 units having been built in Mexico last year.
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