Hyundai President and CEO Jaehoon Chang and other executives presented the company’s electrification plans to shareholders, investors and various stakeholders at the “2022 CEO Investor Day” virtual forum. The company also unveiled sales and financial performance targets to be achieved by 2030.
The road map for Hyundai’s battery electric vehicle (BEV) is supported by:
- strengthening BEV line-ups
- optimising manufacturing capacity
- securing hardware and software competitiveness.
Hyundai also presented its mid-to-long-term financial goals, earmarking KRW 95.5 trillion (~$A110 billion) of investment for future businesses by 2030 and targeting an operating profit margin of 10% or higher in EV businesses by enhancing competitiveness in hardware and software capabilities with an expanded line-up.
“Hyundai is successfully accelerating its transition to electrification and becoming a global leader in EVs despite a challenging business environment caused by the global chip shortage and ongoing pandemic,” Chang said. “Along with our seamless efforts to improve EV value, Hyundai Motors will continue to secure its business sustainability as a ‘mobility solutions provider’ through advanced hardware and software technologies.”
Strengthening BEV line-ups
Hyundai Motors raised the annual BEV sales target to 1.87 million units by 2030, up from the previously announced 560,000 units by 2025. The company aims to take a 7% market share of the overall global BEV market.
Hyundai plans to introduce 17 BEV models – 11 Hyundai marque models along with six models from the Genesis luxury brand – by 2030 as it seeks to expand the BEV spectrum. The new Hyundai BEV models will include three sedans, six SUVs, one light commercial vehicle and one new model type. This year, Hyundai begins sales of IONIQ 6, followed by IONIQ 7 in 2024.
The Genesis luxury brand’s BEV line-up consists of two passenger cars and four SUVs, including the electrified GV70, which launches this year. Starting in 2025, all newly launched models from Genesis will be electrified.
Optimising EV manufacturing capacity
Hyundai Motors aims to establish a high-efficiency manufacturing process for BEV production to accelerate its transition into electrification. The Hyundai Motor Global Innovation Centre in Singapore (HMGICS), the cornerstone for innovation in the company’s mobility value chain, will build a human-centred manufacturing innovation platform. The platform is expected to bring dramatic innovation in production efficiency through a flexible production system, advanced-level automation and digital twin technology. The innovation will be expanded to global plants in the future.
Beyond existing BEV production facilities centred in Korea and the Czech Republic, Hyundai plans to gradually expand its BEV manufacturing bases, starting with an Indonesian plant that recently commenced operation. The Indonesian plant will start BEV production this year.
As BEV production bases expand, the company will aim to increase the local procurement rate of batteries through strategic alliances with battery companies in major regions to secure sufficient battery supply. In 2025, the company expects to obtain more than 50% of its next-generation lithium batteries for BEVs through these alliances.
In addition, Hyundai will also diversify battery sourcing to consolidate the competitiveness of future BEVs. The company has secured sufficient battery supply to meet its sales targets through to 2023. It plans to continue cooperation with various battery companies with the aim of securing 170 GWh of batteries for its models, including the Genesis luxury brand, by 2030.
Hyundai is cooperating with various global partners to improve the energy density and cost efficiency of the next-generation batteries, such as the solid-state battery.
Securing hardware and software competitiveness
Hyundai Motor plans to introduce an integrated modular architecture (IMA), evolved from the electric global modular platform (E-GMP) that is the foundation of IONIQ 5 and GV60 that was successfully launched in 2021. The IMA will be utilised as Hyundai Motors’ passenger BEV platform and as its exclusive purpose-built vehicle (PBV) platform, helping to streamline production processes and reduce costs.
The IMA is being developed to standardise not only a chassis but also the battery system and motor. The innovative architecture can be used for BEV models in all segments, improving the driving range.
Unlike the existing BEV development system, which has different types of battery packs for each model, IMA can be equipped with standardised battery packs to attach flexibly, regardless of the model, to improve cost efficiency. The new architecture can secure sufficient energy density through the cell-to-pack system and shorten charging time.
Five standardised types of motors also will be installed on IMA according to model needs. This modular motor system can secure competitiveness in terms of cost and weight as well as motor efficiency.
Hyundai Motors will also strive to develop software architectures to provide a satisfying ownership experience for customers. The company plans to apply an over-the-air (OTA) update to new models that will be launched at the end of 2022 and then expanded to all Hyundai models by 2025. In addition, the number of integrated control units can be reduced by one-third by 2030.
In terms of autonomous driving technology, the Highway Driving Pilot (HDP), a Level 3 autonomous driving function, will be applied to Genesis G90 from the second half of this year. The Motional, the autonomous driving joint venture between Hyundai Motor Group and Aptiv, plans to expand the service area of an IONIQ 5-based robotaxi following its commercial service commencement in 2023 and start self-driving delivery services this year through partnerships with Uber Eats.
Hyundai will achieve software transformation by expanding the business areas of mobility, connectivity and other services based on data and by enhancing software competitiveness. To do so, the company will establish specialised centres of excellence for software development in Korea and abroad.
By 2030, the company will invest a total of KRW 12 trillion (~$A13.5 billion) to boost competitiveness in software capabilities, including KRW 4.3 trillion (~$A4.8 billion) on technology development, such as connectivity and autonomous driving, KRW 4.8 trillion (~$A5.4 billion) on strategic investment for startups and research institutions, and KRW 2.9 trillion (~$A3.3 billion) on information and communications technology (ICT). After 2030, the company target is for the revenue from software-related businesses to represent approximately 30% of total sales.
Hyundai also disclosed mid-to-long-term financial goals through to 2030, including the investment of KRW 95.5 trillion. Out of the total investment, KRW 39.1 trillion (~$A44 billion) will be allocated for research and development, and KRW 43.6 trillion (~$A49 billion) for capital expenditures to enhance business competitiveness, while KRW 12.8 trillion (~$A14.5 billion) will be dedicated to strategic investment.
The KRW 95.5 trillion expenditure plan includes KRW 19.4 trillion (~$A22 billion) for investment into the electrification field to expand EV production capability, build charging stations and engage in strategic technology alliances.
By 2030, Hyundai aims to achieve a 10% operating profit margin in EVs by increasing sales volume and innovating cost structure. A strengthened EV line-up and development of efficient next-generation batteries and IMA will help the company meet its financial goals. The company has also set an operating margin goal of 10% on a consolidated basis.
Hyundai Motors strives to enhance shareholder value through a market-friendly return policy, despite concerns over uncertainties in the business environment in 2022.
National Collision Repairer Editor: There is no doubt that the move towards an electrified car parc is gaining momentum, and repairers would be well advised to begin preparation for this inevitable shift in their customer base.