Skip to content
  • KOSPI 3213.63 -29.02 -0.89%
  • KOSDAQ 1034.69 -9.44 -0.90%
  • KOSPI200 425.48 -4.01 -0.93%
  • USD/KRW 1147.4 -7.40 -0.64%
  • JPY100/KRW 1,048.48 -2.34 -0.22%
  • EUR/KRW 1,364.6 -3.32 -0.24%
  • CNH/KRW 177.12 -0.12 -0.07%
View Market Snapshot

EV parts makers

Korean auto parts players to shine as carmakers go all in on EVs

By Feb 08, 2021 (Gmt+09:00)

Mando's Steer by Wire system
Mando's Steer by Wire system

Korean auto parts makers have rarely been favored by stock investors as they were regarded as mere subcontractors, with their performance largely dependent on local carmakers.

With nearly all major global automakers and tech giants going all in on electric vehicles, however, Korean auto parts players are rapidly coming into the spotlight given their technology and capacity to make the components required of EVs.

Analysts say Korean companies are well positioned in the global EV value chain as Hyundai Motor Co. and Kia Corp. are among the leading automakers shifting to EVs and future mobility in general.

In December, Hyundai Motor unveiled the Electric-Global Modular Platform (E-GMP) designed exclusively for battery EVs, saying the platform will serve as the core technology for the group’s next-generation EV lineup.

Graphics by Jerry Lee
Graphics by Jerry Lee

Having set a goal of supplying 8-10% of the world’s EVs by 2025, Hyundai plans to introduce more than 12 battery-powered electric cars built on the E-GMP, brightening the outlook for auto parts makers.

Among major global carmakers, only four – General Motors Co., Volkswagen Group, Hyundai Motor and China’s Geely – have EV-dedicated platforms, ready to roll out battery-powered cars.

Japan’s Toyota Motor Co., which has developed its own EV platform architecture e-TNGA, has yet to unveil an electric car based on the platform.


Global auto parts players have outperformed their Korean peers with the manufacture of components for combustion-engine cars, but this, in turn, has made them relatively late in preparing for the upcoming EV era.

While German parts makers enjoyed the popularity of gasoline and diesel cars in China made by the likes of Daimler AG, commonly known as Mercedes-Benz, Japanese auto parts makers focused on hybrid cars.

Graphics by Jerry Lee
Graphics by Jerry Lee

In the meantime, Korean auto parts makers have shifted their focus to EV components.

Local EV battery trios – LG Chem Ltd., Samsung SDI Co. and SK Innovation Co. – have supplied battery components to Volkswagen, which also procures other parts from Korean suppliers; EV tires from Hankook Tire & Technology Co. and automotive compressors from Hanon Systems Co.

GM, for its own EV platform, gets batteries from LG Chem, motor converters and inverters from LG Electronics Inc., headlamps from SL Corp. and tires from Hankook Tire.

“When compared with combustion-engine cars, automotive parts used in EVs are five times more expensive per unit,” said Samsung Securities auto analyst Im Eun-young.


Analyst Im said that stock investors can take advantage of the expected gains from the Korean auto parts players in two ways – either invest in suppliers that advance into the US EV market jointly with Hyundai and Kia, or buy shares of parts makers that have business tie-ups with global automakers. Maybe both.

Hyundai and Kia, the two automaking units of the Hyundai Motor Group, are widely expected to provide the E-GMP to other carmakers and tech giants that plan to enter the burgeoning electric car market.

Analysts expect Korean automakers to produce more EVs in the US than their Chinese rivals from 2022.

Hyundai Motor’s E-GMP platform for electric vehicles
Hyundai Motor’s E-GMP platform for electric vehicles

SL Corp., which entered the US market by supplying headlamps to Hyundai and Kia there, is forecast to see its US revenue rise 50% this year, with its global sales estimated at 3 trillion won ($2.7 billion), up 20% from 2020.

Korean suppliers such as Hanon, Mando Corp., Woory Industrial Co. and Pyeong Hwa Automotive Co. count Chinese EV automakers NIO Co. and Xiaopeng Motors Co. as their new clients, in addition to existing customers Tesla Inc. and Volkswagen.

Mando, Woory and Pyeong Hwa also supply components to US EV startups Canoo Inc. and Rivian Co.

Reflecting the expected gains from the global EV value chain, the price-to-earnings ratios (PER) of Mando and Hanon are hovering around a multiple of 30 times. The PE multiple of Hyundai Mobis Co., an affiliate of Hyundai Motor, stands at 15 times, signaling further upside potential.

“Hyundai Mobis is one of our top picks among the auto parts plays as Hyundai Motor Group’s E-GMP is set to take off soon,” said NH Investment & Securities analyst Cho Soo-hong.

Write to Jae-Yeon Ko at

In-Soo Nam edited this article.

Comment 0