Hyundai zeroes in on hybrid cars, longer-range EVs

Hyundai Motor Co. will double its hybrid vehicle lineup to 14 models and develop longer-range electric vehicles to overome a prolonged EV chasm, or a slowdown in EV demand, said its Chief Executive Chang Jae-hoon on Wednesday.

To develop hybrid models and advanced EV powertrains, the South Korean carmaker will spend 92.7 trillion won ($69 billion) in the sectors through 2034.

That represents 77% of its investment of 120.5 trillion won earmarked for the next decade, compared with its 2023-2032 spending plan of 109.4 trillion won unveiled last year.

South Korea's largest carmaker, a sibling of Kia Corp., will roll out hybrid variants for 14 models, including subcompact, full-size cars and luxury models. Currently, it applies hybrid engines to seven models, primarily subcomact and mid-sized ones.

In February, The Korea Economic Daily exclusively reported that Hyundai would likely release hybrid cars under its premium brand Genesis in 2025, including its popular models of the G80 sedan and the GV70 SUV.

Hyundai's hybrid cars, to be mass-produced from next year, will fit in with the next-generation hybrid systems (TMED-II), Chang said at the company’s 2024 CEO Investor Day forum on Wednesday.
 
TMED is Hyundai's proprietry technology. Its secong-generation model significantly improves the performance and fuel efficiency than its predecessor (TMED), but costs as much as that for the preceding one.

To boost its hybrid car output, it will use its EV-dedicated plant in the US state of Georgia to manufacture hybrid cars to meet the demand in the US once it comes online in the fourth quarter of this year.

Hyundai targets 1.33 million units of hybrid car sales in 2028, a 40% increase from its sales in 2023.

RANGE EXTENDER FOR GENESIS EVs

Hyundai is also developing extended-range EVs (EREVs), including for mid-size SUVs under the Genesis brand. It targets 80,000-unit sales for Genesis EREVs annually. 

EREVs refer to EVs with next-generation powertrains. They run on gasoline and can travel more than 900 km. Hyundai will begin their mass production in North America and China in 2026 for launch in 2027.

Earlier this month, The Korea Economic Daily exclusively reported that Hyundai is developing a next-generation powertrain, known as a range extender, for pickup trucks and sport utility vehicles.

At the annual CEO investor day forum, Hyundai shared the plan to develop low-nickel batteries by 2030 and embed them into EVs. The price of nickel-cobalt-manganese (NCM) batteres has been on the rise due to the surge in nickel prices.

It is seeking to internalize battery technology, including for all-solid-state batteries to improve EV performance and cost competitiveness.

SALES GOALS, DIVIDEND POLICY

Despite the slow EV uptake, Hyundai stuck to its 2030 EV sales target of 2 million units.

That is equivalent to around one-third of its sales goal of 5.55 million units for all types of vehicles for the same year. The figure is 30% higher than last year’s sales volume of 4.21 million units.

Combining Kia’s 2030 sales target of 4.3 million units, Hyundai Motor Group is expected to achieve nearly 10 million units in global sales by 2030.

Starting in 2025, Hyundai will return 35% or more of its net profit to shareholders in dividend or treasury stock retirement annually, Chang said at the forum. That is about 10 percentage points higher than its total shareholder return in 2023.

Under the plan, the company will retire about 4 trillion won worth of treasury stock for next three years, starting in 2025. It aims to increase its return on equity to 11-12% by 2025-2027 from the current 9-10%.

“Responding to market demand in an agile and flexible manner, we will create a new future centered on the two pillars: mobility and energy,” Chang said in the forum. “Hyundai Motor will expand into various mobility areas beyond automobile manufacturing to strengthening its position as a game changer.” 

By building a hydrogen ecosystem, it aims to achieve zero emissions across the life cycle of cars from production to driving and scrapping by 2045.

Write to Jae-Fu Kim and Jin-Won Kim at hu@hankyung.com
 
Yeonhee Kim edited this article