"South Korea to Develop as Future Car Business Hub"... Hyundai Motor to Invest 63 Trillion Won Domestically Over 4 Years (Update)

Hyundai Motor Group's Three Companies Make Large-Scale Investments to Develop 'Future Business Hubs'
"Enhancing Korea-Centered Global Competitiveness... Leading the Great Shift in Industrial Paradigms"

Chairman Chung Euisun of Hyundai Motor Group

[Asia Economy Reporter Choi Dae-yeol] Hyundai Motor Group's three companies?Hyundai Motor, Kia, and parts manufacturer Hyundai Mobis?have decided to invest 63 trillion KRW in South Korea by 2025. This move aims to further strengthen the capabilities of domestic business sites as a hub for the entire industrial value chain, including research and development and production, amid the rapidly changing global automotive industry. When including investments from other affiliates, the mid-to-long-term investment scale is expected to increase significantly.

According to the mid-to-long-term investment plan announced by Hyundai Motor Group on the 24th, the investment areas are broadly divided into three sectors: electrification and eco-friendly fields, new technologies and new businesses, and existing businesses. First, the electrification and eco-friendly sector focuses primarily on developing next-generation electric vehicles and parts, as well as securing advanced hydrogen fuel cell technologies. The combined investment scale of the three companies is about 16.2 trillion KRW. This covers all vehicle types, including pure electric vehicles, hydrogen electric vehicles, and plug-in hybrids.

To increase production capacity, a new dedicated plant for Purpose Built Vehicles (PBV) electric cars will be constructed, while the mixed production system for internal combustion engine vehicles and electric vehicles will be gradually expanded. A dedicated plant with an annual capacity of up to 150,000 units is planned to be built on the Kia Hwaseong plant site, targeting mass production in the second half of 2025.

Electric vehicle dedicated lines will also be expanded at existing plants. Investments will be made in developing core parts, advanced technologies, and high-performance electrification products, as well as research facilities. While increasing the variety of electrification products, the company plans to refine the PE system, including batteries and motors, which are directly linked to product performance. They also aim to extend the driving range per charge to enhance product competitiveness. The company plans to develop an improved integrated modular architecture, better than the current electric vehicle dedicated platform, and release it around 2025. The eM platform is developed exclusively for passenger electric vehicles, and the eS platform is dedicated to PBVs.

Kia Hwaseong Plant (Autoland) overview. Currently, Plants 1 to 3 are in operation, and the new plant is expected to be dedicated to PBV electric vehicles.

Charging infrastructure will also be expanded. Together with other companies, Hyundai Motor Group plans to increase the number of ultra-fast chargers in South Korea to 5,000 units. In the UBESS (Used Battery Energy Storage System) sector, which repurposes used batteries as energy storage devices, various new businesses will be pursued. Additionally, in the hydrogen business, the group will improve fuel cell system efficiency and expand infrastructure for dedicated parts research facilities, alongside new products such as passenger cars, buses, and trucks. To broaden applications and secure core technologies, active investments in external startups will also be made.

Regarding future new technologies and businesses such as robotics, Advanced Air Mobility (AAM), and connectivity, 8.9 trillion KRW will be invested. In robotics, the plan includes product research and development as well as establishing and demonstrating services and business models. For AAM, the group intends to develop Urban Air Mobility (UAM) and Regional Air Mobility (RAM) aircraft and internalize core technologies. They will also accelerate infrastructure development and concretize business models.

Software technologies essential for future smart cars, such as over-the-air updates, will be refined and advanced. In autonomous driving, the group plans to develop Level 4 element technologies, including redundancy systems for emergency situations, with commercialization in mind. Robot taxis and shuttles will also undergo continuous demonstration projects in urban areas in preparation for commercialization.

Hyundai Motor Company's first dedicated electric vehicle, the Ioniq 5, being assembled at the Hyundai Motor Ulsan Plant

38 trillion KRW will be spent on enhancing the product competitiveness of existing internal combustion engine vehicles and improving customer services. This is because, despite the growing demand for electric vehicles, internal combustion engine vehicles are expected to account for about 80% of total domestic sales even by 2025. The finished car companies will optimize the internal combustion engine product lineup, while parts companies will focus on quality improvement. The company stated, "While respecting customers' choice for internal combustion engine vehicles with lower purchase burdens, this will also significantly contribute to maintaining profitability for affiliated parts companies during the transition to electrification, thereby securing future investment resources."

Considering Hyundai Motor and Kia's status in the domestic automotive industry, the industry expects Hyundai Motor Group's aggressive investment to serve as a strong supporter during the restructuring of the entire Korean automotive industry's business structure. A company official said, "We plan to strengthen global business competitiveness centered on Korea," adding, "Through continuous domestic investment not only in future new businesses, new technologies, and electrification but also in existing businesses, we will provide differentiated products and highly satisfying services to customers," and emphasized, "We will lead the paradigm shift in the automotive industry."