European car market in chaos… Hyundai Motors competes with new Kona

Hyundai Motor Group has decided to preemptively launch vehicles that meet the Euro 7 (European exhaust gas regulation) standards starting next year, which will take effect in November 2026. We have also decided to speed up the launch of electric vehicles and only release electric vehicles in Europe by 2035. This is to maximize the benefits of the European Union (EU) decision to increase China’s electric vehicle tariff rate from 10% to a maximum of 45.3%.

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View larger image According to the industry on the 30th, Hyundai Motor Group will begin assembling prototype vehicles that meet Euro 7 standards from the 4th of next month. The first target is Hyundai’s compact sports utility vehicle (SUV) ‘Kona’. It is reported that the internal combustion engine model will change the engine and engine exhaust system in line with Euro 7, and the hybrid car model will change the battery system, etc. Euro 7 is a very strong environmental regulation that considers non-exhaust pollutants and battery lifespan.

It is known that Hyundai Motor Group sees now as the right time to target the European market and has devised an aggressive strategy.

Europe imposes 45.3% tariff on China… ‘Reflection benefit’ Hyundai Motor Company’s eco-friendly car Accelerator

There is a reason why Hyundai Motor Group decided to release a vehicle that meets this standard in the second half of next year, a year ahead of the implementation of Euro 7 (November 2026). This is because they believed that next year would be the best time to delve into the European market. European manufacturers such as Volkswagen have lost their competitiveness due to Chinese electric vehicles, which have grown rapidly in recent years. In response, the European Union (EU) decided to raise the tariff rate on Chinese electric vehicles from 10% to 45.3% on the 29th (local time), raising the possibility that China’s electric vehicle market share will drop significantly in the future. In order to fill this gap, it was decided to preemptively release a vehicle that meets Euro 7 standards.

○New Kona mass production target for November next year

According to the industry on the 30th, Hyundai Motor Company will assemble prototypes of the internal combustion engine model and hybrid model of the small sports utility vehicle (SUV) ‘Kona’ that meets Euro 7 regulations starting on the 4th of next month. Hyundai Motor Company plans to complete development in May and June next year and begin mass production in November next year. Hyundai Motor Group has decided to apply this technology to other models of Hyundai Motor Company and Kia Motors as soon as development of the new Kona is completed.

The reason Hyundai Motor Company chose the Kona as its first model is because it is a model that sells well in Europe. 62,021 units of Kona were sold in the European market from January to September this year, of which 48,635 units, or 78%, were electric vehicle (22,789 units) and hybrid car (25,846 units) models. In terms of sales volume, it is less than Tucson (53,120 units), but the proportion of eco-friendly car sales is much higher than Tucson (56.1%).

The reason Hyundai Motor Group began developing Euro 7 vehicles is to rebuild the lagging European market. Hyundai Motor Company and Kia’s European market sales from January to September were 821,925 units, down 3.4% compared to the same period last year. During the same period, the European market share (8.4%) also fell by 0.4 percentage points.

As the EU introduced non-exhaust pollutant emission standards for the first time in Euro 7, each automobile company was forced to make huge investments in technology. The industry estimates that European automakers that fail to meet this standard will have to pay a fine of 15 billion euros (about 22 trillion won) or give up production of more than 2.5 million vehicles. Euro 7 raised the standard to measure the number of exhaust gas particles at the smaller PN10 level instead of the existing PN23 (nominal pressure 2.3 MPa). For the first time, standards for non-exhaust pollutants, such as fine particles generated as tires or brake pads wear out, were applied. Fine dust (PM10) from tires or brakes for internal combustion engines, hybrid cars, and fuel cell vehicles must not exceed 7 mg per km, and for pure electric vehicles, it must not exceed 3 mg per km. The minimum durability that electric vehicle and hybrid car batteries must guarantee is also specified.

○European car market in chaos

The biggest reason why Hyundai Motors and Kia are struggling in Europe is because of the onslaught of Chinese electric vehicles. According to the European Automobile Manufacturers Association (ACEA), Chinese cars’ share of the European electric vehicle market jumped from 2.9% in 2020 to 21.7% last year. As a result, not only Hyundai Motor Group but also European automakers suffered a serious blow. Volkswagen Group, Europe’s No. 1 company, has announced a drastic restructuring plan that will close three factories in Germany and cut wages by 10%. Chinese cars release new cars every year, but European cars are assessed to be lagging behind in the race for technological innovation, taking four years to develop new cars.

This is why Europe decided to impose tariffs of up to 45.3% on Chinese electric vehicles. The EU cited the Chinese government’s subsidies as the reason for raising tariffs, but its intention is to protect European automobile companies. As the competitiveness of European cars has declined and the market share of Chinese cars is bound to fall, Hyundai Motor Group has an excellent opportunity. Hyundai Motor Company’s strategy is to expand its market share by producing customized products for Europe across its entire lineup, including internal combustion engines, hybrid cars, and electric vehicles. We decided to speed up the launch of electric vehicles and make all vehicles sold in Europe electric by 2035.

Reporter Shin Jeong-eun/Kim Jae-hoo [email protected]