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World News | Hyundai’s India expansion: Can Korean automaker challenge China’s EV dominance

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Streaks of light seen in California. (Image source: video capture)

Author: Li Jiahui

SINGAPORE, May 15 (ANI): Last week, South Korea’s Hyundai Motor Co announced it will invest Rs 2,000 crore (US$2.45 billion) in Tamil Naidu over the next 10 years to boost its electric vehicle (EV) production in India. .

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SNE Research, which provides global market research and consulting to the rechargeable battery industry, ranks Hyundai as the sixth-largest EV maker by sales in 2022. The Asian automaker is ramping up its production capacity in an effort to become one of the world’s top three electric vehicle makers by 2030.

The South Korean automaker, whose brands include Hyundai, Kia and Genesis, delivered 510,000 electric vehicles last year, up 40.9% from 2021, according to SNE Research. The first place was China’s BYD, which delivered 1.87 million vehicles, followed by Tesla, which delivered 1.31 million vehicles. Germany’s Volkswagen and China’s Geely ranked fourth and fifth respectively.

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CEO Jaehoon Chang told CNBC, “We are now developing two other platforms, which will enable us to have 18 models by 2030. Our goal is to achieve 2 million electric vehicle sales around 2030.”

The automaker is investing heavily in research and development, building new factories and platforms, and expanding electric vehicle production lines and capacity.

“We are now developing two more platforms, which will enable us to have 18 models by 2030. Our goal is to achieve 2 million (annual) electric vehicle sales around 2030,” Hyundai CEO Jang explain.

Its EVs are currently being developed on Hyundai Electric Global Modular Platform (E-GMP), an advanced custom electric vehicle platform. The 2021 Ioniq 5 crossover SUV is the first model from Hyundai’s EV-focused sub-brand Ioniq to be developed on E-GMP. Hyundai then launched the Ioniq 6 sedan in 2022. EV platforms can scale up production of future models and reduce development and manufacturing costs.

Hyundai Motor plans to launch vehicles based on its two new electric vehicle platforms eM and eS in 2025, which are expected to improve vehicle development efficiency and further reduce costs.

Away from the spotlight, Hyundai has slipped to third place in the global race to become the world’s largest automaker by 2022. Hyundai and Kia sold a combined 6.85 million vehicles globally last year, up 2.7 percent from a year earlier, according to industry data compiled by CNBC. Leader Toyota sold nearly 10.5 million vehicles, while European auto giant Volkswagen sold around 8.26 million.

Hyundai reported a 92% year-on-year increase in net profit for the first quarter of 2023, “mainly driven by the U.S. and Europe,” Chang said.

Hyundai reported a net profit of 3.42 trillion won ($2.56 billion), up from 1.78 trillion won a year earlier. Revenue rose 24.7 percent year-on-year from 30.3 trillion won to 37.78 trillion won.

Hyundai is eager to make an impact in the Chinese auto market, but the company’s current presence is very limited.

“We have a joint venture in China. We are now delving into how to regain competitiveness in the Chinese market,” Chief Executive Zhang said. Electric vehicle sales in China are expected to exceed 8 million by 2023, according to Counterpoint Research.

“I think the first step we’re looking at is how to optimize our ability to operate in China. The next step should be that we focus on the product mix, which should be attractive to local customers with comparable software capabilities, as well as hardware and design capabilities,” Chang said in an interview with CNBC.

In 2022, nearly two-thirds of the world’s pure electric vehicles will be produced in China, and a quarter of the cars sold in China will be electric vehicles. In China, more than 94 brands offer more than 300 models, priced from $5,000 to $90,000. Local brands account for 81% of the EV market, with BYD, Wuling, Chery, Changan and GAC leading the way.

Europe comes in second, followed by North America, accounting for 17% and 11% of global EV production in 2022, respectively.

For now, it appears that China has secured an insurmountable lead in the race to become the leading EV maker. However, it is still early days, with only 9% of all light vehicles being electric last year, there is plenty of room for other markets to catch up.

Government support plays a big role in where China is today. Between 2009 and 2022, China provided more than 300 billion yuan ($43.5 billion) in procurement subsidies and tax breaks to support locally produced electric vehicles of domestic and foreign brands. The government also offers large procurement contracts to buy products from emerging EV companies, which helps them early on and funds further research and development.

In Chennai, Tamil Nadu, known as the Detroit of Asia, Hyundai plans to increase the production capacity of its factory near Chennai to 850,000 vehicles a year from about 775,000. In addition, the automaker’s Indian subsidiary Hyundai Motor India will set up a battery pack assembly plant with an annual capacity of 178,000 units and install 100 electric vehicle charging stations in southern states within the next five years.

The investment plan comes on the heels of the federal government’s recent announcement that it would raise taxes on imported cars 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, in part because of the COVID-19 pandemic. It was originally scheduled to be completed last November.

Andy Kang, head of Hyundai’s sales innovation group, said the plant will initially import the cars’ fully painted body shells from its newly opened factory in Indonesia, with all other components shipped in from South Korea. It plans to gradually source parts locally as production ramps up.

Apart from the Ioniq 5, the newly launched Ioniq 6 and the new Kona Electric will also be assembled at the Jurong factory. By 2025, the plant plans to produce as many as 30,000 vehicles per year.

“Our goal is to become the number one EV brand in Singapore,” Kang said. The position is currently held by Tesla. (Arnie)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)


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