Title: Hyundai Motor Increases EV Sales Target and Announces Strategic Plans for Electrification
Subtitle: Hyundai Motor to invest $28 billion in electrification and restructure China business to boost EV sales
SEOUL, June 20 (Reuters) – Hyundai Motor, the world’s No. 3 auto group by sales, has announced its plans to raise its average annual investment in electrification by nearly two-thirds, with a total spending of $28 billion over the next decade. The South Korean automaker, along with its affiliate Kia, aims to boost electric vehicle (EV) sales and has raised its EV sales target to 2 million units by 2030, up from 1.87 million.
The increased sales target represents around one third of Hyundai’s total vehicle sales, a significant increase from the expected 8% this year. The company attributes this decision to the growing global demand for EVs, which is surpassing market forecasts.
To meet the ambitious sales target, Hyundai plans to enhance local production of EVs in its key markets, including the United States, Europe, and South Korea. This move aligns with the increasing incentives provided by countries for locally manufactured vehicles. In the United States, Hyundai aims for EV production to account for three-quarters of its total vehicle production by 2030, a significant jump from the current 0.7%.
Hyundai Motor CEO Jaehoon Chang also mentioned the possibility of making their vehicles more compatible with the charging standard promoted by Tesla in North America, indicating a potential collaboration between the two companies.
In addition to the focus on EV sales, Hyundai plans to restructure its struggling China business to prioritize profitability. The company has already sold one China plant in 2021 and intends to sell two more, while rationalizing the remaining two plants for exports to emerging markets. The product line-up in China will be reduced from 13 to 8 models, with a focus on high-end and SUV models, including the Genesis luxury brand.
To enhance its competitiveness in the EV market, Hyundai plans to invest 9.5 trillion won ($7.4 billion) over the next 10 years in the development of next-generation batteries. The company aims to introduce lithium-iron-phosphate (LFP) batteries, a cheaper alternative to lithium-ion batteries, for the first time around 2025. This move aligns with the recent announcement by its rival, Toyota, to also start using LFP batteries.
Hyundai aims to source more than 70% of its batteries through joint ventures by 2028 and beyond. The company plans to collaborate with specialized companies, startups, and battery manufacturers to ensure a stable supply of batteries. Joint research and equity investment in startups are also underway to accelerate the development of next-generation batteries.
With these strategic plans, Hyundai aims to achieve an operating profit margin of 10% or higher in the EV business by 2030. The $28 billion investment in electrification is part of a larger budget of 109.4 trillion won that Hyundai plans to spend through 2032.
Overall, Hyundai Motor’s increased investment in electrification, raised EV sales target, and restructuring of its China business demonstrate the company’s commitment to the growing demand for EVs and its determination to strengthen its position in the global EV market.
How is Hyundai Motor restructuring its China business to strengthen its presence in the electric vehicle market and boost EV sales?
Global trend towards autonomous driving technology. The company recognizes the potential of automated driving systems and “self-driving” cars in the future, which aligns with its long-term strategic plans for electrification.
In addition to increasing its investment in electrification, Hyundai Motor will also restructure its China business to further boost EV sales. The company aims to strengthen its presence in the Chinese market, which is the world’s largest automotive market and a key player in the global shift towards electric vehicles.
With these strategic plans, Hyundai Motor is positioning itself as a major player in the electric vehicle market. By increasing its EV sales target and investing significantly in electrification, the company is signaling its commitment to sustainable mobility and addressing the growing demand for electric vehicles worldwide.
By focusing on local production of EVs in key markets such as the United States, Europe, and South Korea, Hyundai aims to take advantage of the incentives provided by these countries for locally manufactured vehicles. This localization strategy not only helps meet the increasing demand for electric vehicles but also creates job opportunities and contributes to the economic growth of these regions.
Furthermore, Hyundai Motor recognizes the potential of autonomous driving technology and its impact on the future of mobility. While the article does not provide specific details about the company’s plans for autonomous driving, Hyundai CEO Jaehoon Chang mentioned the possibility of making their vehicles more compatible with this technology. This suggests that Hyundai is keeping a close eye on the advancements in automated driving systems and may incorporate them into their future electric vehicle models.
Overall, the article highlights Hyundai Motor’s strategic plans to increase its investment in electrification, raise its EV sales target, and enhance local production to meet the growing global demand for electric vehicles. The company’s focus on key markets and its recognition of the potential of autonomous driving technology further demonstrate Hyundai’s commitment to innovation and its primary goal of sustainable mobility.
Hyundai’s massive investment in electric vehicles is a remarkable display of their commitment to a greener future. With an increased sales target, they are making an undeniable mark in the EV market. Kudos to Hyundai for taking bold steps towards sustainable transportation.