Hyundai Motor eyes EV battery production from 2027

Hyundai Motor Co. is preparing to build its first electric vehicle battery production lines by around 2027, taking its first step to internalize battery technology in line with its push to boost EV performance and cost competitiveness, according to people with knowledge of the matter on Tuesday.

It is considering setting up the production lines with a capacity of 1-2 GWh at its R&D center to be constructed in Anseong, Gyeonggi Province. One gigawatt hour (GWh) corresponds to the battery power to run 13,000 EVs.

It will manufacture prototype battery products there, separate from the batteries it purchases from battery cell makers, the sources told The Korea Economic Daily.

The largest carmaker in South Korea has been in talks with cathode materials suppliers such as L&F Co., LG Chem Ltd. and Chinese materials companies since the second quarter of this year to directly purchase the battery materials.

They are now negotiating the volume and price of the supplied cathodes, which will be shipped from around 2027, they added.

It is highly likely to churn out ternary batteries such as nickel-cobalt-manganese (NCM) batteries, said the sources.

Hyundai is also considering outsourcing the production of batteries it designs to SK On and other battery cell makers under original equipment manufacturing contracts, instead of manufacturing them at its production lines.

If succeeding in internalizing battery technology, Hyundai will be able to enhance its production efficiency and competitiveness by installing its EVs with tailor-made batteries.

EVs under the brands of Hyundai, its sibling Kia Corp. and Hyundai’s premium sub-brand Genesis are equipped with pouch-type NCM, or nickel-cobalt-manganese-aluminum (NCMA) batteries, supplied by SK On Co. and LG Energy Solution Ltd.

The electric models of their budget cars such as Kona, Niro and Ray use CATL’s lithium iron phosphate (LFP) batteries.

Its battery production will also facilitate its advance into the battery recycling market.

Its prototype battery production will unlikely cut the volume of batteries it buys from SK On and other bettery cell makers.

Hyundai is not alone in pursuing battery technology internalization. Batteries account for 40% of EV manufacturing costs and determine much of the vehicles' performance, such as mileage.

Tesla is mass-producing 46-pi cylindrical batteries that fit into its EVs. Battery cell makers have not yet produced these so-called next-generation batteries.

BYD has equipped 80-90% of its EVs with its own batteries. The Chinese carmaker has reduced EV manufacturing costs by internalizing the battery technology.

General Motors Co. and Toyota Motor Corp. recently announced battery cell production plans.

Meanwhile, Hyundai has recently slashed its 2030 vehicle sales targets by 6% to brace for a protracted slowdown in EV uptake.

Write to Sang Hoon Sung, Kyung-Kyu Kim and Woo-Sub Kim at uphoon@hankyung.com
 

Yeonhee Kim edited this article.