DIC Expects Additional Order for 200,000 Tesla Vehicles in the US... Hyundai Motor Volume Increases

[Asia Economy Reporter Lim Jeong-su] DIC, a leading domestic company in the electric vehicle (EV) reducer sector, is expected to secure an additional order for about 200,000 EV units from the U.S. electric vehicle company Tesla. As Hyundai Motor's EV production volume is expected to increase significantly, DIC's performance is also projected to improve rapidly.

According to the automotive industry on the 12th, Tesla recently indicated the possibility of placing an additional order for 200,000 EV reducers from DIC. If the order is finalized, it will be an additional order following the agreement to supply 200,000 units annually. Once the final decision is made, DIC will supply 400,000 EV reducers annually to Tesla.

A DIC official said, "As the U.S. consumer economy improves, EV production volume is increasing, and the order volume is also on the rise," adding, "A certain U.S. electric vehicle company has expressed its intention to place an additional order, and it is currently under internal review."

[Image source=Yonhap News]

The order volume from Hyundai Motor, a key supplier, is also showing a rapid increase trend. Hyundai Motor plans to increase its EV production volume from 200,000 units last year to 350,000 units this year. Since all EVs produced by Hyundai Motor are equipped with reducers made by DIC, DIC's order volume will increase accordingly.

The heavy equipment transmission business division is reportedly receiving so many orders recently that it is difficult to handle all of them with the current production capacity. DIC currently supplies transmissions to three companies: Doosan Infracore, Hyundai Construction Equipment, and Clark. A DIC official stated, "In the heavy equipment sector, the production plant is operating at full capacity, barely meeting the delivery deadlines for the order volume."

Thanks to the strong order performance, DIC is rapidly improving its results after a long period of stagnation. According to the Q1 earnings announcement on the 10th, DIC turned to a quarterly profit on a consolidated basis for the first time in four years. Sales increased by 16.1% to 144.6 billion KRW compared to the same period last year (124.5 billion KRW), and net profit significantly improved from a 2.7 billion KRW loss to a 10.78242 billion KRW profit during the same period.

The trend of performance improvement is expected to continue with successive orders. DIC expects to record sales of about 126 billion KRW or more in Q2 this year based on separate financial statements. This figure represents approximately a 25% increase compared to Q1 sales this year.

A DIC official forecasted, "Orders for EV reducers and transmissions have been continuously increasing since last year," and added, "We expect to maintain the trend of performance improvement."