GLOBAL DATA – Following the news that Hyundai has announced an influx of new investments in the Asia-Pacific, Europe, and North America to fast-track the company’s electric vehicle (EV) business; Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:
“Hyundai Motor’s announced future strategies and the roadmap for electrification come as an update to the ‘Strategy 2025’ announced in the year 2020. The new investments will strengthen Hyundai’s position in key EV markets such as Europe, North America and South Korea. The investments will help Hyundai to achieve deeper penetration in high-demand regions and develop other capabilities which include – boosting production capacity, new EV facility, developing battery technologies, developing hardware and software capabilities, and hence achieving higher profit margins.
“The company has announced a total investment of KRW95.5 trillion (US$79.21bn) through 2030, of which about KRW19.4 trillion (US$16.10bn) will be towards EV related businesses. With the investments, the company aims to up its global EV ranking to 7% of the global EV market by 2030 and clock sale of 1.87 million BEVs annually by the same period. The targets are up compared to 8-10% market share by 2040 target and 560K annual sales by 2025 target announced earlier.
“The development highlights the company’s confidence to penetrate the EV business despite being relatively new in the EV business when compared to other global OEMs. Hyundai EV business has been performing well in key regions including North America, Europe and South Korea. The group collectively accounted for 7.3%, 10.7% and 74% of the total BEV sales, respectively in these regions, in 2021.
“The company also aims to use the investment to procure adequate batteries for its future EVs, which is a ‘must have’ to sustain in the future mobility market given the volatile nature of the supply chain observed in the post-pandemic era. With continuing alliances with battery manufacturers, Hyundai aims to secure 170 GWh of batteries for its models by 2030.
“Hyundai agile business strategy, particularly on EVs, has proved to be a success and has been bearing the fruits. This is evident from the Hyundai Group’s BEV sales growth over the past few years. The group sold 243,480 BEVs in 2021, accounting for 5.3% of the global market.
“Given the Hyundai’s dynamic strategies on EVs, investments, existing sales trends and macroeconomic factors, GlobalData forecasts Hyundai Group’s global BEV penetration to reach 6.2% by 2030.”