[Special Stock] Hyundai Gongup Benefits from US IRA... Increased EV Parts Orders through Local Interior Production

Hyundai Industrial is showing strong performance. As the future car industry, including autonomous driving and electric vehicles, develops, it appears to be influenced by analysis reports suggesting that Hyundai Industrial will benefit from the premiumization of interior materials and the expansion of convenience features.

As of 10 a.m. on the 24th, Hyundai Industrial is trading at 8,040 KRW, up 4.01% from the previous trading day.

Research Alom forecasted that Hyundai Industrial will benefit as Hyundai Motor Company and Kia pursue a strategy to produce electric vehicles and parts locally in the United States.

Researcher Lee Seung-hwan of Research Alom explained, "Hyundai Motor Company and Kia plan to produce not only manufacturing facilities but also most parts installed in vehicles, such as batteries and key materials, in the U.S.," adding, "This is a measure to respond to the U.S. Inflation Reduction Act (IRA), which provides subsidies only for U.S.-made electric vehicles."

He continued, "According to the first detailed IRA guidelines announced by the U.S. Treasury Department on the 17th, subsidies will be provided only to vehicles of U.S. domestic brands such as GM," but added, "Hyundai Motor Company and Kia plan to replace the batteries installed in their electric vehicles with U.S.-made ones within this year to secure subsidies."

He expected, "Most vehicle parts except batteries are already scheduled to be supplied as U.S.-made," and "Parts manufacturers producing locally in the U.S. will benefit."

Researcher Lee analyzed, "Hyundai Industrial invested about 13.1 billion KRW earlier this year to purchase a new factory and logistics warehouse in Newnan, Georgia," and "plans to establish production facilities by the first half of this year and start operations from the second half."

He added, "The main production items are armrests, headrests, and leg rests," and "the annual production capacity is about 300,000 units." Furthermore, he emphasized, "They have already secured orders for many electric vehicles such as the Ioniq 5 and Ioniq 7, which Hyundai and Kia plan to produce in the U.S.," and "they aim to secure full orders for about 10 new electric vehicle models to be mass-produced in the future."

Researcher Lee stated, "Hyundai Industrial is the only company producing the above products locally in the U.S.," and "it is judged that securing full orders for new electric vehicles is fully possible." He continued, "Hyundai Industrial is the only company producing armrests, headrests, and leg rests locally in the U.S.," and "it is judged that securing full orders for new electric vehicles is fully possible."

Hyundai Industrial is estimated to achieve sales of 317.1 billion KRW and operating profit of 19.2 billion KRW this year, representing increases of 13.9% and 27.7%, respectively, compared to last year. Researcher Lee said, "Due to the characteristics of the automotive industry, the highest profit margin is generated during the first three years after a new car is released," and added, "Since major production models such as the G90, Grandeur, K7, EV6, Ioniq 6, and Starex were launched in the second half of last year, the profit margin is expected to be high this year."