Hyundai Motor to Produce Hybrid Vehicles at New Electric Vehicle Plant in the U.S.?

Munoz Global Chief Operating Officer
Interview: "Reviewing Production at Georgia Plant"
Impact of Demand Slowdown and Emission Regulation Relaxation
Thousands of Billions Spent on Production Line Installation

Jose Munoz, Hyundai Motor's Global Chief Operating Officer (COO and Head of North America), revealed in an interview with local media that the company is considering producing hybrid models at the new factory being built in the United States.

Hyundai Motor Group originally planned the facility as an electric vehicle (EV)-only plant and is currently progressing with construction aiming for completion by the end of this year. This move is interpreted as an effort to find a breakthrough by producing hybrid vehicles amid a slowdown in EV demand. However, from the company's perspective, producing hybrid vehicles would require a comprehensive readjustment of the originally planned production processes and lines, so caution is advised. The EV plant under construction in Georgia is a large-scale project with an investment of 6.3 trillion won.

Hyundai Motor's Electric Vehicle Factory Under Construction in the United States
[Photo by Yonhap News]

According to a report by the U.S. economic media CNBC on the 27th (local time), Munoz stated at the New York International Auto Show, "We are reviewing whether to produce not only pure electric vehicles but also hybrid or plug-in hybrid electric vehicles (PHEVs) at the Georgia plant," adding, "We are evaluating if additional technologies need to be incorporated based on market assessment."

Hyundai Motor Group began construction with the goal of completing the plant by 2025. They now expect production to be possible starting around the end of this year. Since U.S. consumers must purchase vehicles produced locally to qualify for EV tax credits, the company aims to operate the new U.S. plant as soon as possible. As it is an EV-dedicated plant, a battery factory will also be established nearby.

Industry insiders believe that the slowdown in EV demand and the easing of emission regulations have influenced this consideration. Due to the economic downturn and the still inadequate charging infrastructure, the growth of EVs has slowed down contrary to previous expectations. Hyundai Motor Group’s strength in hybrid technology also appears to be a factor. Munoz said, "Since Hyundai has played a pioneering role in the PHEV sector, we want to leverage this advantage," adding, "There is high demand for hybrids, so you will see an increase in the proportion of hybrids at Hyundai as well."

Jose Munoz Hyundai Motor Global Chief Operating Officer
[Photo by Yonhap News, AP]

Following recent emission regulations announced by the U.S. Environmental Protection Agency, there is talk of a possible slowdown in the electrification transition. While the long-term plan to switch to electric vehicles remains, emission standards will be relaxed over the next 4 to 5 years to give automakers time to adapt. This decision was influenced by concerns over jobs raised by both local automakers and labor unions due to the rapid electrification shift.

However, some say that Munoz’s remarks are still at the review stage and actual implementation may not be easy. Producing hybrid vehicles would require installing separate production lines, which would cost hundreds of billions of won. It is much more cost-effective to produce hybrids at existing Hyundai and Kia plants in the U.S. rather than installing separate lines at the EV-only plant.

Hyundai’s Alabama plant in the U.S. currently produces the mid-to-large SUV Santa Fe hybrid model and sells it locally. The newly unveiled Tucson will also be sold locally with various lineups, including internal combustion engine, hybrid, and PHEV versions. An industry official said, "It is reasonable for the COO to say that they are considering various options to increase eco-friendly vehicle production," adding, "The decision will depend on related regulations and additional costs."

Hyundai's new Tucson was unveiled for the first time in North America at the New York International Auto Show. Hybrid and plug-in hybrid models were also released together.
[Photo by Yonhap News]