[Exclusive] Hyundai Motor and Kia to Launch Vegan Leather New Cars Next Year... New Factory Established in Bangladesh

Mycel Project, an in-house venture from Hyundai Motor Group, leads development of mushroom mycelium-based artificial leather... Collaborates with Kolon Glotech
Following pilot line tests this year, plans to establish mass production factory in Bangladesh next year

[Asia Economy Reporters Hyewon Kim and Junhyung Lee] Hyundai Motor Group is developing a new car that replaces automotive seats with vegan leather, aiming to launch it as early as next year. The plan is to establish a pilot line domestically within this year as a testing ground and build a mass production factory in Bangladesh next year.

According to industry sources on the 10th, Hyundai Motor and Kia are pushing forward detailed plans to apply vegan leather developed by Mycel Project (hereafter Mycel) to a large electric sports utility vehicle (SUV) model scheduled for release next year.

It is particularly meaningful that Mycel, a company originating from an in-house venture, is participating in the commercialization of vegan leather for Hyundai Motor and Kia. Mycel is a bio-material company that develops materials such as vehicle composites and fabrics based on eco-friendly mushroom mycelium. It became an independent company in 2020 after going through Hyundai Motor Group’s in-house startup support program.

The company is currently collaborating with Kolon Glotech, a parts supplier for Hyundai Motor Group, to attempt the development of various products. A representative from Kolon Glotech stated, "We are in the early stages of business planning and are discussing multiple possibilities."

Vegan leather is a type of synthetic leather cultivated from mushroom mycelium and other materials without using natural leather or chemical substances. Using plant-based vegan leather has become a new trend in the global automotive industry, including Mercedes-Benz, BMW, and Tesla.

The industry expects Hyundai Motor and Kia to prioritize applying vegan leather mainly to electric vehicles, which are eco-friendly cars. The first model is likely to be Kia’s large electric SUV. It is also reported that there are plans to expand this to the Genesis electric vehicle lineup.

The global automotive industry’s focus on vegan leather is due to the prevalence of ESG (Environmental, Social, and Governance) management, with many environmentally friendly factors involved in the manufacturing process. Mercedes-Benz is developing plant-based vegan leather directly, and BMW and Audi are also developing and testing vegan leather for use in leather seats.

Among vegan leathers, mushroom mycelium stands out because, unlike conventional chemical materials that rely heavily on imports and cause environmental pollution, both its production and disposal processes are eco-friendly. It is also notable for its potential to expand into various fields such as mycelium leather and alternative meat. So far, it remains a business with strong symbolic value, involving early investment based on growth potential. Another advantage of mushroom synthetic leather is its cost-effectiveness. It can reduce processing costs by about 30% compared to the leather processing costs from one cowhide.

Mycel aims to establish a pilot factory in Korea around October. The facility will be equipped with automated equipment for cultivating mushroom mycelium and mass-producing vegan leather, serving as a test bed. Starting next year, they plan to build a full-scale commercial factory in the Dhaka area of Bangladesh, producing about 4,000 sheets of vegan leather daily, each approximately 1㎡ in size. A Mycel representative explained, "To supply leather for automotive seats for one vehicle model, production must be capable of 1,500 to 2,000 sheets daily."