Palisade Hybrid Production Preparation... Hyundai Motor's 2-Week Shutdown Construction

Hyundai Motor Halts Operation of Ulsan Plant 4 Line 1
Preparation Work for New Palisade Production
All-New Model to Launch Next Year After 7 Years
New Palisade Equipped with 2.5 Turbo Hybrid

Hyundai Motor Company is embarking on a two-week facility construction to produce the new model of its large sport utility vehicle (SUV), the Palisade. The Palisade, scheduled for release next year, is expected to be equipped with Hyundai Motor Group's first 2.5ℓ turbo hybrid system. As the company is introducing a new hybrid system, it is known to be paying special attention to the process.

According to comprehensive reporting on the 29th, Hyundai will halt operations on Line 1 of Ulsan Plant 4 from today until the 10th of next month to carry out facility construction for the new Palisade (project name LX3). This construction will establish production facilities for the second-generation Palisade hybrid model, with full-scale mass production expected to begin early next year.

The current first-generation Palisade is produced at Ulsan Plants 2, 4, and 5. Plant 4 is the main production site, but production has been gradually increased due to high domestic and international demand. Until 2019, annual production was around 100,000 units, but it increased to 160,000 units last year. As of last year, 75% of annual Palisade production was exported, reflecting its steady popularity overseas.

The production of the second-generation completely redesigned model will also start at Ulsan Plant 4, with additional volume allocations to be decided based on labor-management agreements. In 2021, Hyundai considered producing the Palisade in the United States but shifted its strategy to increase domestic production due to union opposition.

However, since the Palisade’s main export market is the United States, known as the "home of large SUVs," and Hyundai is currently establishing hybrid production facilities at its U.S. electric vehicle-only plant (HMGMA), which aims to start operations in October this year, there is a possibility that local production may be reconsidered.

The Palisade was initially recognized as a cost-effective flagship SUV, but sales have declined as the new model launch approaches. This is partly due to the Santa Fe, released in the second half of last year, which features a larger body and emphasizes an outdoor image. Additionally, rising interest rates have made consumers hesitant to purchase large vehicles. Moreover, the Palisade lacked a hybrid model, which led to its neglect in the eco-friendly vehicle market.

Hyundai will equip the completely redesigned Palisade, released after seven years, with a newly developed 2.5ℓ turbo hybrid system. This system, specialized for mid-to-large vehicles, features a larger battery and two motors. While Hyundai’s existing hybrid systems primarily rely on the engine as the main power source with a small single motor assisting, the new system uses two motors as the main drivers, offering driving capabilities closer to those of electric vehicles.

Currently, most Hyundai hybrid systems are based on a 1.6ℓ gasoline engine. Depending on the vehicle model, the size of the electric motor and battery varies, resulting in differences in output. Consequently, large models like the Carnival and Staria did not meet the domestic low-emission vehicle tax benefit criteria for hybrid fuel efficiency. Hyundai has increased the output power and improved the fuel efficiency of the new Palisade system. This will satisfy eco-friendly vehicle tax benefits and emphasize practicality as a true family car.

There are also speculations that Hyundai is considering a 9-seat model. If the Palisade is released as a 9-seat model, it would be allowed to use bus-only lanes when carrying six or more passengers, and multi-child families (three or more children) could receive acquisition and registration tax reductions. A Hyundai official stated, "The domestic plant facility construction is a preparatory stage for producing the new model, and there is still a lot of time before full-scale mass production." They added, "We cannot confirm detailed information such as new car specifications."