Hyundai Motor Co is Investing $52 Billion in Electric & Autonomous Vehicles and Mobility Services by 2025
【Summary】South Korean automaker Hyundai Motor Co is looking to be a world leader in electrification, autonomous driving and advanced mobility services by making one of the biggest investments of any automaker in its future. Hyundai will invest 61.1 trillion won ($51.81 billion) between 2020 and 2025 for research and development in advanced mobility.
Many global automakers are committed to building more electric vehicles over the next five years, but South Korean automaker Hyundai Motor Co is looking to be a world leader in electrification, autonomous driving and advanced mobility services by making one of the biggest investments of any automaker in its future.
The automaker announced an aggressive new roadmap called "Strategy 2025." as the automaker looks to be an industry leader in the future of mobility. Hyundai will focus on two new business sectors, "Smart Mobility Device" and "Smart Mobility Service" as part of the company's transformation to become a smart mobility provider and a leading producer of electric vehicles.
Hyundai's plans for Smart Mobility Device extend outside of autos and includes the development of Personal Air Vehicles (PAV), robotics, and last-mile mobility vehicles.
Hyundai's Smart Mobility Service side of the business will focus on delivering services and personalized content through an integrated mobility platform.
To achieve its aggressive goals, Hyundai will invest 61.1 trillion won ($51.81 billion) between 2020 and 2025 for research and development (R&D). Hyundai's long term strategic direction was presented by the company's President and CEO Wonhee Lee during the "CEO Investor Day" forum in Seoul.
"The key to our future strategy is to focus on customers and to present the most desirable products and services. We want to offer smart mobility experiences that meet shifting needs of our customers by leveraging advanced technology," said President Lee. "Transforming into a Smart Mobility Solution Provider with comprehensive mobility solutions that combine devices and services will be the centerpiece of Hyundai's future strategy"
Hyundai will make the investment over a six year period beginning in 2020, roughly equal to 10 trillion won (~$8.4 billion) per year. Around $34 billion will be allocated for product and capEx in existing businesses, while the remaining investment will be dedicated to future technologies including electrification, autonomous driving, AI and robotics.
Hyundai has defined three key directions that the company will adhere to, including enhancing profitability in internal combustion engine (ICE) vehicles, becoming a leader in vehicle electrification, and laying the groundwork for platform-based businesses.
Hyundai said it will aim for growth that is balanced and steady, prioritizing long-term sustainability over short-term targets.
More Affordable EVs
A significant part of the initiative is producing more electric vehicles, as the auto industry moves towards electrification. Hyundai aims to sell 670,000 electric vehicles annually, which includes 560,000 BEVs and 110,000 fuel-cell electric vehicles (FCEVs). Hyundai is aiming to become one of the world's top three manufacturers of battery and fuel cell EVs by 2025.
The automaker plans to electrify most new models by 2030 in key markets such as Korea, North America, China, and Europe, followed by emerging markets such as India and Brazil by 2035.
Hyundai will target younger demographics and enterprise customers with more affordable battery electric vehicles (BEVs) to achieve economies of scale, following a similar plan by Volkswagen.
To save costs, Hyundai plans to reduce the manufacturing complexity of EVs by developing a scalable modular EV architecture beginning with models being launched in 2024. Vehicle architecture processes will be optimized by region, and improved manufacturing will be implemented to further enhance efficiency and profitability.
By improving profitability and manufacturing efficiency, Hyundai will be able to introduce more electrified vehicles in its product lineup. The successful Genesis luxury brand in the global luxury vehicle market is also expected to further enhance the company's profitability.
Hyundai's Genesis brand will launch its first fully-electric models in 2021, before expanding its electric lineup in 2024. The high-performance N brand also plans to launch SUVs and EVs, boosting Hyundai's competitiveness in the EV space.
Development of Autonomous Driving Technology
Hyundai plans to offer Level 2 and 3 autonomous driving features to its model lineup by 2025, including Advanced Driver Assistance System (ADAS) for self-parking. In addition, the company aims to develop a full autonomous driving platform by 2022 and begin mass production by 2024.
Hyundai will focus on providing an innovative digital user experience (UX) powered by artificial intelligence (AI) based connected services, and safety-first autonomous driving
Smart Mobility Service
On the Smart Mobility Service side of its business, Hyundai aims for a business model that combines product and service and launch an integrated mobility platform to offer customers personalized content and a connected ecosystem of services.
Hyundai will build an integrated mobility platform that analyzes data from in and around the vehicle through car connectivity. Hyundai will offer personalized services tailored to the needs of each customer.
Strategy 2025 also details optimization for its Smart Mobility Service in each region where it will operate. In the U.S., car sharing and robotaxi services will capitalize on the commercialization of autonomous vehicles of SAE Level 4 or higher. Level 4 autonomy that no human intervention is needed for the domain the vehicle will operate in.
In Korea, Asia, and Australia, Hyundai plans to enter the mobility service market by partnering with leading local players. In Europe and Russia, where the service industry is mature, the company will first focus on businesses that combine products and services.
Hyundai also announced plans to buy back 300 billion won ($252 million) worth of its own shares from the market by February next year as part of its continuous efforts to boost shareholder value.
"Hyundai will always prioritize its customers and strive to connect people's lives with quality time," said President Lee. "We will do our utmost to equip ourselves for the future, to lead the future mobility industry, and maximize shareholder value."
Hyundai is planning to make organization and management changes for the successful implementation of Strategy 2025. To reach its goals, Hyundai plans to create a new corporate culture centered around communication and collaboration between employees.
Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.
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