Hyundai sets goal to be one of world’s top 3 EV makers by 2030, chasing Tesla and BYD

Hyundai Motor Group has announced its goal to become one of the world’s top 3 EV manufacturers by 2030.

The Korean car manufacturer, which also owns the Kia and Genesis brands, says that it will invest KRW 24 trillion ($A24 billion) by 2030 on increasing production and exports as well as fostering EV-related industries.

The group says that by 2030 it will have a total lineup of 31 EV models. Kia will launch EV9, its first three-row seat electric flagship SUV, this year and Hyundai Motor plans to launch the Ioniq 7 in 2024.

The announcement was made on Tuesday at the groundbreaking ceremony of Kia’s dedicated plant for purpose-built vehicle (PBV) production in Korea.

Reshuffling of the top ten automakers

Based on 2022 sales revenue Hyundai was only the 9th biggest automaker in the world. However, there will be a big reshuffling of the top ten as the world moves to electric vehicles.

While the Korean companies are currently further down the list than the Japanese, German and US automotive giants, Hyundai and Kia have moved much faster on on their EV offerings than the likes of Toyota, Volkswagen and Ford and its EV offerings have been highly regarded.

The Hyundai Group says it plans to significantly expand its annual EV production in Korea to 1.51 million units and global volume to 3.64 million units by 2030.

It says the large-scale investment aims to upgrade Korea’s EV ecosystem and strengthen its role as a hub for driving innovation in the global automotive industry. It is also expected to promote a virtuous cycle of domestic EV production, R&D, infrastructure and related industries.

The Group will invest heavily in R&D, such as developing a platform for next-generation EVs, expanding product lineups, developing core parts and advanced technologies, and establishing research facilities. It will also promote technology development with its partners.

Hyundai plans on supporting suppliers and building a charging network

Hyundai says it will also support its suppliers by sharing the cost burdens of fluctuating raw materials. The company says it payed around KRW 3.4 trillion ($A3.86 billion) for the increase in raw material delivery to more than 300 primary suppliers last year.

The Group will also help its suppliers’ liquidity by establishing a fund to enable suppliers of internal combustion engine parts who wish to diversify their businesses, including the development of EV parts so that they can borrow business funds at low interest rates compared to the market.

In addition, Hyundai will also build a high-speed charging network to maximise charging convenience for EV customers.  In April 2021, the group launched E-pit, a high-speed EV-charging brand, and also launched the E-pit Charging Service Platform (E-CSP) in the following year.

Hyundai chasing Tesla and BYD

Hyundai’s goal is to chase Tesla and Chinese EV manufacturer BYD who are currently the top 2 EV makers in the world based on volume. Tesla and BYD are both scaling up production rapidly. Tesla produced 1.3 million EVs in 2022 and hopes to get close to 2 million in 2023.

BYD produced 911,000 fully electric vehicles in 2022 up from 320,000 in 2021 representing a staggering 184% production growth rate.

Korean companies have a history of identifying trends early. In 2006 Finnish company Nokia held 48% of the world’s mobile phone market. That changed dramatically with after the launch of Apple’s iPhone in 2007.

While Nokia was unable to make the shift to touch screen smart phones, Korean company Samsung identified the shift and now holds over 20% of the smart phone market.

Automotive market may converge to just a handful of brands

Like Apple and Samsung’s dominance of the smart phone market, the transition of the global automotive market could see it converge to just a few brands who dominate market share.

During Tesla’s Investor Day presentation, Tesla CEO Elon Musk was asked how many models Tesla planned on eventually producing. Musk said probably not that many, “around 10” he said.

Musk’s response indicated that he believes that the entire industry may shift from having hundreds of different models to just a few in a similar shift to what happened with mobile phones with the launch of the smart phone.

“What’s happened with conventional cars is people have run out of things to do so they just end up reshuffling the deck,”

“I mean, how many [car models] are there on the road? It’s like hundreds. But are they good variants? No, mostly not. They’re just variants for the sake of variance.” said Musk.

“Look at how have things converged with the phone,”

“There used to be hundreds of flip phones now what do we have? It will be like that.”