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Hyundai Closes its Combustion Engine Development Division as it Begins its Transition to Becoming an Electric Automaker

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【Summary】Hyundai Motor Co quietly closed its engine development division at its research and development center on Dec. 23. The company will stop developing new internal combustion engines in order to accelerate its transformation into an electric vehicle manufacturer, the Korean Economic Daily reported. Hyundai's aggressive electrification plans include supplying roughly 10% of the world's EVs by 2025.

Eric Walz    Dec 28, 2021 12:55 PM PT
Hyundai Closes its Combustion Engine Development Division as it Begins its Transition to Becoming an Electric Automaker

As automakers around the world make plans to electrify their model lineups and develop new battery powered vehicles, some are abandoning internal combustion engine development altogether, including German automaker Audi, which announced it will stop developing gas-powered engines by 2026.

Now South Korea's top automaker Hyundai Motor Corp has announced similar plans. The company will stop developing new internal combustion engines in order to accelerate its transformation into an electric vehicle manufacturer, the Korean Economic Daily reported.

Hyundai quietly closed its engine development division at its research and development center, on Dec. 23, according to industry sources. The Namyang R&D Center in South Korea employs around 12,000 researchers.

"The immediate task is to develop innovative vehicles that can dominate the future market," said the newly appointed R&D head, Park Chung-kook. "This reorganization will be an important starting point for change ahead in the new year.

Hyundai Motor has already converted its teams focused on combustion engine powertrain development, into units dedicated to electrification development. The Namyang R&D Center will also focus on raw materials for batteries and semiconductors.

Hyundai's engine development team was established in 1983 by the late Chung Ju-yung, Hyundai Group founder and grandfather of current Hyundai Motor Group Chairman Chung Euisun. At the time Hyundai was still a fledgling automaker, but the founder insisted that the company make its own engine to better compete with its more established rivals, according to the Korean Economic Daily.

Hyundai Motor unveiled its first gas engine in 1991. The more advanced successors to that original engine helped to make Hyundai among the world's top five automakers in the span of 30 years.

Electric vehicles have far fewer parts than their gas-powered counterparts. But as the global auto industry transitions towards wide scale electrification, investments in engine development, including fuel systems and emissions reduction technology, will no longer be needed.

"Now, it is inevitable to convert into electrification," Park Chung-kook wrote in an email to employees. "Our own engine development is a great achievement, but we must change the system to create future innovation based on the great asset from the past."

Hyundai first announced in June that it would stop developing traditional transmissions and powertrains.

A report by Reuters earlier this year said that Hyundai will be cutting 50% of internal-combustion models from its lineup as a way to free up resources to invest in electric vehicles. The updated strategy was approved by top level executives at Hyundai in March. 

Although Hyundai has no plans to develop any new gasoline-vehicle powertrains, the automaker will continue to focus on improving the efficiency of its existing internal combustion powertrains.

Hyundai's decision comes as Europe and China are forcing automakers to accelerate their electric vehicle plans in order to reduce CO2 emissions. 

In Dec 2020, Hyundai announced its updated five-year plan called "Strategy 2025" that it said will help transform the company into one of the world's world's leading mobility providers and largest manufacturers of electric cars and hydrogen fuel cell powered vehicles.

Hyundai aggressive plans include supplying roughly 10% of the world's electric vehicles by 2025. To achieve its goal, Hyundai will expand the offerings under it's new IONIQ sub brand, which is dedicated to producing only battery powered vehicles.

In September, Hyundai also announced that its luxury brand Genesis will only sell electric vehicles by 2025

With these initial EV plans already in place, it appears that Hyundai will no longer require any new investments in engine technology going forward.

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