South Korea’s Hyundai Motor Co announced that it will invest 200 billion rupees (US$2.45 billion) in Tamil Naidu over the next 10 years to scale up its electric vehicle (EV) production in India. SNE Research which provides global market research and consultancy to the rechargeable battery industry ranked Hyundai as the top 6th EV car maker by sales in 2022. The Asian carmaker is ramping up its production capabilities as it aims to become one of the top three electric vehicle makers in the world. by 2030. The South Korean carmaker whose brands include Hyundai, Kia and Genesis delivered 510,000 EV units last year.
According to SNE Research, this is an increase of 40.9 percent from 2021. The first place was held by China’s BYD, which delivered 1.87 million units, followed by Tesla with 1.31 million units. Germany’s Volkswagen and China’s Geely secured the fourth and fifth positions, respectively.
CEO Jaehoon Chang told CNBC, “We are now developing two more platforms and that will help us to have 18 models by 2030. And we (are aiming) to achieve 2 million EV sales around 2030.”
The carmaker is investing heavily in research and development, building new plants and platforms as well as expanding EV lines and production capacity.
Hyundai CEO Chang said, “We are now developing two more platforms and this will help us to have 18 models by 2030. And we aim to achieve 2 million (annual) EV sales around 2030.”
Its EVs are currently developed on an advanced bespoke EV platform, the Hyundai Electric Global Modular Platform (e-GMP). The 2021 Ioniq 5 crossover SUV was the first model from Hyundai’s EV-focused sub-brand Ioniq to be developed on E-GMP. Hyundai will launch the Ioniq 6 sedan model later in 2022. An EV platform scales the production of future models and reduces development and manufacturing costs.
Hyundai plans to introduce vehicles based on its two new EV platforms, the EM and ES, in 2025, which is expected to lead to more efficient vehicle development and greater cost reduction.
Away from the limelight, Hyundai has slowly slipped to third place in the global race to become the largest global automaker in 2022. Hyundai and Kia sold a total of 6.85 million vehicles globally last year, up 2.7 percent from a year earlier, based on industry data compiled by CNBC. Top dog Toyota sold around 10.5 million units, while European auto giant, Volkswagen sold around 8.26 million units.
Chang said Hyundai will report a 92 percent year-over-year increase in net profit in the first quarter of 2023, “mainly driven by the US and Europe”.
Hyundai reported a net profit of 3.42 trillion won (US$2.56 billion), up from 1.78 trillion won in the same period a year earlier. Revenue grew 24.7 percent year-on-year, from 30.3 trillion won to 37.78 trillion won.
Hyundai aspires to make an impact in China’s automotive market but at the moment the company’s exposure is very limited.
CEO Chang said, “We have a joint venture in China. Now we are deeply considering how we can achieve the competitiveness of China market.” According to Counterpoint Research, China’s EV sales are expected to exceed 8 million units in 2023.
“I think the first step we are looking at is how we can optimize operational efficiencies in China. And the next step should be our focus on a product portfolio that is attractive to local customers with comparable software functions. should be, as well as hardware and design features,” Chang said in the CNBC interview.
In 2022, China will produce nearly two-thirds of all global battery EVs and one in four cars sold in China is an EV. In China, more than 94 brands together offer more than 300 models, which sell for only US$5,000 to US$90,000. Local brands account for 81 per cent of the EV market, with BYD, Wuling, Chery, Changan and GAC being some of the top players.
Europe is a distant second, followed more closely by North America, accounting for 17 percent and 11 percent, respectively, of global EVs manufactured in 2022.
For now, it looks like China has gained a huge lead in the race to become the leading EV manufacturer of electric vehicles. However, it’s still early days, with only nine percent of all light vehicles last year being EVs, there’s plenty of room for other markets to catch up.
Government support has a big role to play in the situation China is in today. Between 2009 and 2022, China committed more than CNY300 billion (USD 43.5 billion) in subsidies and tax breaks to support locally produced EVs, both domestic and foreign-owned brands. The government also offered large purchase contracts to budding EV companies to buy products, helping them in their initial years and helping them drive R&D.
In Chennai, Tamil Nadu, which has been called the Detroit of Asia, Hyundai plans to increase capacity at its factory near Chennai from about 775,000 to 850,000 vehicles per year. In addition, the automaker’s Indian subsidiary, Hyundai Motor India, will set up a battery pack assembly unit with an annual capacity of 178,000 units and set up 100 EV charging stations in the southern state over the next five years.
The investment plan follows the central government’s recent announcement that it will raise taxes on imported vehicles to encourage local manufacturing.
In Singapore, Hyundai said earlier this year that its Singapore assembly plant in Jurong would start rolling out the electric Ioniq 5 by the middle of this year, after a delay partly caused by the COVID-19 pandemic. It was originally supposed to be completed last November.
Andy Kang, head of Hyundai Motor’s sales innovation group, said the plant will initially import the car’s fully painted body shell from its newly opened factory in Indonesia, with all other parts being shipped from South Korea. Once production volumes increase, it plans to gradually source components locally.
In addition to the Ioniq 5, the newly unveiled Ioniq 6 and the new Kona Electric will also be assembled at the Jurong facility. The plant is set to produce 30,000 vehicles per year by 2025.
“We aim to be the number one EV brand in Singapore,” Kang said. That position is currently held by Tesla.