Hyundai eyes Japan’s commercial EV market in e-bus deal with Iwasaki

South Korean top automaker Hyundai Motor Co. said on Tuesday it is supplying its all-electric Elec City Town buses to Iwasaki Group, effectively entering Japan’s commercial EV market to support the neighboring country’s electrification push.

Under a letter of intent (LOI) signed in Tokyo last week, Hyundai will deliver all five Elec City Town buses by the end of next March, starting with one such e-bus this winter.

Cho Won-sang, head of Hyundai Mobility Japan, and Iwasaki Group Chief Executive Yoshitaro Iwasaki signed the LOI.

They said the two companies would soon sign a formal contract.

Iwasaki Group is a transportation and tourism business operator based in Kagoshima Prefecture in southwestern Japan.

The LOI marks Hyundai’s first commercial electric bus supply deal with a Japanese company.

HYUNDAI E-BUS TO RUN ON UNESCO HERITAGE SITE ROUTE

Hyundai said the Elec City Town will conform to Japan's charging standards and be customized for the local market, including the right-hand side steering wheel.

The nine-meter-long, midsized bus, equipped with a 145 kWh battery, can run up to 220 kilometers on a single charge. The vehicle also boasts safety devices such as vehicle dynamic control (VDC) and reverse parking distance warning systems.

Hyundai said the Elec City Town will initially be used for routes in outlying communities, starting with routes on a Yakushima island UNESCO World Heritage site in Kagoshima Prefecture.

"It is meaningful that our emission-free vehicles will run in a globally renowned natural heritage area in Japan,” said a Hyundai Motor official.

Hyundai said the Elec City Town bus in May completed drive tests on two of the most difficult routes on Yakushima.

The Korean carmaker said it plans to establish an inventory management system to supply more than 95% of Elec City Town auto parts within two days for swift maintenance and repair work.

For parts that can be damaged frequently, Hyundai is considering supporting part of the replacement costs over a certain period.

EXTRA COMMERCIAL HYUNDAI EVs IN JAPAN

Hyundai said it plans to roll out more commercial EVs in Japan following its Elec City Town deal with Iwasaki.

In 2022, the Korean automaker said it is re-entering the Japanese car market after a 12-year hiatus, starting with the IONIQ 5.

Hyundai first entered Japan in 2001 but gave up its passenger car business in 2009 due to weak sales there.

Currently, the company sells electric vehicles only in Japan.

Hyundai plans to release a compact electric crossover, the Casper Electric, or the Hyundai Inster as it is known globally, in Japan next year.

Separately, Kia Corp., Hyundai’s sister firm, plans to bring a hybrid version of its subcompact Sonet SUV to Japan.

Industry officials said most buses in Japan run on diesel fuel, and the industry has a way to go before making a full-fledged transition to all-electric buses and fuel-cell buses.

China's BYD dominates Japan's electric bus market with a roughly 70% share, with a couple of Japanese automakers taking up the rest of the market share.

Write to Jae-Fu Kim at hu@hankyung.com

In-Soo Nam edited this article.