Hyundai Motor to produce EVs in US from 2022

Hyundai Motor Co. will be bringing forward the production of its electric vehicles in the US to next year, starting with the SUV model GV70, as the world's second-biggest EV market pushes automakers alongside its accelerated zero-emissions goals.

The South Korean carmaker will begin to manufacture GV70, a sport utility vehicle under its premium brand Genesis, in its US plant in Alabama, according to industry sources on Nov. 3.

Going forward, it will expand the US-produced lineup to other EV models, including all-electric SUV, the IONIQ 5, subcompact SUV Kona and GV60, an electric crossover.

Hyundai Motor had planned to fully electrify its product lineup in major global markets such as the US and Europe by 2040. Although no specific timeline has been provided to achieve the goal, its recent decision to begin the US production of an EV model from next year came earlier than had been expected.

At an earnings call on Oct. 26, the automaker said it was considering manufacturing EVs in the US, in line with the US government's policy efforts to speed up global EV adaption.

US President Joe Biden on Aug. 5 signed an executive order to ensure at least half of US vehicle sales by 2030 are EVs. As part of the goals, US Democratic lawmakers in September proposed significantly higher subsidies for zero-emission models assembled in the US from 2027.

US automakers such as General Motors Co. and Ford Motor Co. are churning out new EV models. Tesla's vehicle sales hit a new record of 627,350 units in the first three quarters of 2021.  

Hyundai is positioning itself as a premium brand with the rollouts of Genesis models in the US. This year, it has rolled out the GV80 sedan and the GV80 SUV, as well as the GV70 SUV in the US, as well as in Europe and China.

It aims to promote Genesis as the world's top luxury EV brand by 2030, but all Genesis vehicles are being assembled in its flagship plant in Ulsan, South Korea.

IMPACT ON DOMESTIC PLANTS

As Hyundai is striving to expand its footprint in the rapidly-growing EV market, it may increase the volume of overseas production of EV vehicles. That may result in a cut in its domestic production.

Last May, Hyundai Motor Group unveiled a plan to pump $7.4 billion into its US operations by 2025. The investment will be used in the areas of EVs, hydrogen vehicles, urban air mobility, robotics and autonomous driving, as well as enhancement of its existing production facilities in the US.

The ambitious US investment plan, however, met with strong opposition from its labor union, one of the country's hard-line labor groups. They also opposed the company's plan to move part of EV production lines abroad on fears of job loss.

To appease unionized Korean workers, Hyundai is considering moving the production base of the subcompact Avante and the Sonata sedan back home. 

Goldman Sachs recently revised upward its forecast for the EV market growth to 7.2 million units in the US by 2030 and to 12.5 million units by 2040, compared to 360,000 vehicles in 2020.

Write to Byung-uk Do and Hyung-kyu Kim at dodo@hankyung.com
Yeonhee Kim edited this article