5 Times More Than Planned U.S. Investment
Hyundai Motor Group’s three key affiliates -- Hyundai Motor Co., Kia Corp. and Hyundai Mobis -- will invest a total of 63 trillion won in Korea by 2025, the group announced on May 24.
The domestic investment plan was announced two days after the group's chairman Chung Eui-sun disclosed a plan to invest about 13 trillion won in the United States after his meeting with U.S. President Joe Biden during his visit to Korea.
The group's planned domestic investment is about five times that of its announced U.S. investment.
Of the 63 trillion won, 38 trillion won will go to the internal combustion engine vehicle business, while about 25 trillion won will be used for electrification and new technology businesses.
More specifically, the group will spend 38 trillion won to improve the product quality and service quality of its internal combustion engine car business. It will invest 16.2 trillion won in electrification and eco-friendly businesses such as electric vehicles and hydrogen electric vehicles. The remaining 8.9 trillion won will be allocated to new technologies and new businesses, such as robotics and urban air mobility (UAM).
It is noteworthy that the largest portion of the investment will go to the internal combustion engine vehicle business. “Most parts suppliers still cannot afford to switch to an electrification system,” a Hyundai Motor official explained. “They can reorganize their business structure for future green cars only when they generate profits in their current businesses.”
Hyundai Motor Group currently ranks fifth in the global electric vehicle market with a market share of 5.1 percent, but its electric vehicle business does not generate large-scale profits at the moment. In 2025, internal combustion engine cars are expected to account for 80 percent of its domestic sales. In other words, Hyundai Motor Group will be able to actively respond to future mobility businesses through stable profits in current businesses.
Hyundai Motor Co. and Kia Corp. plan to optimize their internal combustion engine car lineup, while Hyundai Mobis will focus on improving the quality of internal combustion engine car parts. In addition, they will expand infrastructure for stable production such as equipment and facility expansion and the efficiency of production lines and maintain a competitive edge in production and sales.
The group will invest 16.2 trillion won in the field of the electrification and eco-friendly industries by 2025. It will build a purpose built vehicle (PBV) plant, a mixed production system for internal combustion engine cars and electric vehicles, and expand electric vehicle-only lines at existing plants.
It will also invest intensively in research and development (R&D) to develop core parts, prior technologies and high-performance electrification products. It will install 5,000 ultra-fast chargers in Korea as well.
A total of 8.9 trillion won will be invested in new industries such as robotics, advanced air mobility (AAM), connectivity, autonomous driving and AI. In the field of robotics, it will develop and demonstrate models and technologies such as next-generation wearable robots and service robots. In the AAM sector, it will concentrate on developing UAM and regional air mobility (RAM) aircraft, internalizing core technologies and creating infrastructure.
In the connectivity sector, Hyundai Motor Group will push forward with technology advancements such as over-the-air (OTA) updates of vehicle control technology, controller integration, and server voice recognition software. In the autonomous driving sector, Level 4 element technologies will be developed, including a redundancy system.