SEOUL — Hyundai Motor will launch a new electric vehicle platform replacing the one used in today’s Ioniq 5 and Ioniq 6 to achieve double-digit profit margins on EVs by 2030.
The profitability push, key to making EVs a sustainable business proposition, will entail building more EVs in mixed production with internal combustion vehicles at existing assembly plants.
The automaker, maker of the Hyundai mass-market and Genesis premium brands, will also roll out next-generation batteries. Those will include lithium-iron phosphate power packs from 2025 and improved nickel-cobalt-manganese ones. Lithium-metal and solid-state batteries are also under development with solid-state pilot production being prepared.
The new EV strategy aims to rapidly ramp up volume, efficient manufacturing and flexible product engineering to drive down costs and fatten profit margins. Hyundai wants to achieve margins of 10 percent on the coming line of EVs that ride on this newly developed platform.
CEO Jaehoon Chang outlined the vision on Tuesday in the company’s annual CEO Investor Day presentation. He said global sales of EVs are growing faster than originally forecast and said Hyundai would step up investment to keep pace with expanding global demand.
Chang unveiled the campaign as “The Hyundai Motor Way” roadmap.
Under the roadmap, Hyundai will 35.8 trillion won ($28.07 billion) over the next 10 years in electrification, including 9.5 trillion ($7.45 billion) for batteries. The rest will be funneled into the new modular EV platform and increasing the brand’s global production capacity for EVs.
Hyundai now expects to sell 2 million EVs a year by 2030, up slightly from its earlier target of 1.87 million. That compares with sales of some 1.6 million EVs projected by Hyundai Motor Group sibling brand Kia, which will also use a version of the new EV platform.
The group total of 3.6 million EVs in 2030 falls roughly in line with the 3.5 million targeted by Japanese rival Toyota, the world’s biggest automaker, in the same time frame.
“The key parts of the strategy include introducing a next-generation modular architecture for EVs, strengthening EV production capacity, battery development capabilities and future businesses,” Hyundai said in a news release. “The company has also raised sales targets for major regions and is preparing to flexibly adjust its sales targets according to market demand.”
Through the end of the decade, Hyundai will boost localized production of EVs.
Hyundai expects EVs to account for 34 percent of its worldwide production in 2030, up from 8 percent this year. Localized production of EVs in the U.S. will reach 75 percent from the current 0.7 percent; in Europe, localized EVs will account for 75 percent of its sales, up from 0.7 percent.
Key to the strategy is a new Integrated Modular Architecture, or IMA, that will replace the existing Electric-Global Modular Platform, or e-GMP. Whereas the e-GMP can share components and modulars only among nameplates on the same platform, the IMA setup will allow more than 80 modules to be commonized across the brand lineup, regardless of segment or vehicle type.
“With IMA, the company expects to standardize modules and parts between the models to further expand economies of scale and significantly reduce EV development complexity and costs going forward,” Hyundai said. “This breakthrough allows for greater flexibility and efficiency in the development process, paving the way for significant cost savings.”
The new platform will underpin all vehicle classes, from small and large SUVs to pickup trucks, along with flagship models of the Genesis brand, Hyundai said.
The IMA platform will be used on nine Hyundai and Genesis models launching through 2030.
To meet growing demand, Hyundai will pursue a two-track production strategy of adding EV output to existing factories that make internal-combustion and hybrid vehicles while also expanding capacity through dedicated EV assembly lines.
Using existing lines saves investment and ramp up time and can be more cost-efficient, at least initially, than building new EV-only lines, Hyundai said. The company already builds EVs this way in the U.S., South Korea, the Czech Republic and India. It will expand that approach.
In the meantime, Hyundai is investing in dedicated EV lines, including a factory in Georgia set to open in 2024 and another in South Korea that goes online in 2025 for domestic and export use.
Next-generation batteries are another element of Hyundai’s EV profitability push.
With an eye toward lower-cost batteries, for example, Hyundai will introduce lithium-iron phosphate, or LFP, batteries. They will have increased energy density and improved low-temperature efficiency and make it to market around 2025, the company said.
Meanwhile, a new artificial intelligence-based battery management system will ensure real-time monitoring and diagnosis of battery conditions, to help prevent thermal runaway.
“The company is targeting over 10 percent profitability for EVs in 2030 through expanded EV sales, the integrated modular architecture, optimized production and other profitable businesses,” Hyundai said.Hyundai sells three full-electric vehicles in the U.S. – the Kona, Ioniq 5 and Ioniq 6. The company sold 5,736 units of the Ioniq 5 and 222 of the Ioniq 6 in the first quarter.
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