Hyundai will spend $12.6 billion to dive into software-defined vehicles

TOKYO — Fast-moving Hyundai Motor Group says it will plow billions of dollars into developing software in a move to speed product development and boost revenue, including the creation of a new operating system for over-the-air updates in all Hyundai, Kia and Genesis vehicles by 2025.

The sweeping initiative will usher in a wave of “software-defined vehicles” armed with technology that performs at “blazing speeds” and bolsters each car’s resale value, according to the automaker.

It will see the establishment of a Global Software Center, the introduction of a Level 3 autonomous driving system, and the launch of two new electric vehicle platforms from 2025, as the South Korean juggernaut jumps into the accelerating race to release “programmable cars.”

“Our holistic approach will empower Hyundai Motor Group to lead the transformation in the mobility paradigm,” Chung-Kook Park,president of the company’s R&D Division, said while announcing the massive investment Oct. 12. “Creating visionary vehicles empowered with the ability to evolve through software will enable customers to keep their vehicles up to date with the latest features and technology long after they have left the factory.”

Hyundai said it will invest 18 trillion won ($12.6 billion) through 2030 to develop and deploy these software-defined vehicles.

It is joining such rivals as Volkswagen AG, Toyota Motor Corp. and General Motors in creating new operating systems that will run the software-centered cars of tomorrow. Automakers say their future profitability will hinge on the software and services packaged in their products, not their steel, rubber and glass.

“Constantly upgradeable software will provide diverse, stable revenue streams while offering fresh functionality and features to keep customers’ vehicles up to date,” Hyundai said.

By developing software in conjunction with hardware, Hyundai is pledging to “significantly reduce the time required for all mass-production processes, including planning, design and manufacturing.” That, in turn, will deliver more efficiency, lower costs and fatter margins.