Global EV race kicks off with key players investing $168 bn

The global auto industry is rapidly making a full-fledged shift towards electric vehicles (EVs), with the world’s five major market players, including Hyundai Motor Group, pledging a total EV investment of $168 billion.

According to the industry, the world’s fourth-largest motor group Stellantis N.V. said during its 2021 EV Day on July 8 that it will invest 30 billion euros ($35.6 billion) by 2025 in the segment. The company said that 70% of its sales in Europe and 40% of the US sales will come from EV models by 2030.

Stellantis added that all 14 motor brands under its umbrella, including Fiat, Chrysler, Jeep, Peugeot and Maserati will have their own EV lineup.

Stellantis will also build a total of five battery plants in Europe and the US, together with the world’s major battery manufacturers. Reuters reported that Samsung SDI Co. has been in talks with Stellantis to build the automaker’s battery plant in the US.

“While we are reviewing various options from setting up a joint venture to building the factory on our own, nothing has yet been confirmed,” said a Samsung SDI official. At the same time, however, other industry sources in Korea reported that the deal between the two firms is already in the final stages.

Another European auto group, Volkswagen AG, will be making the world’s largest sum of investment in the EV segment, totaling 33 billion euros ($39.1 billion) by 2024. The Volkswagen Group is the maker of Audi e-tron, Volkswagen ID.3 and ID.4.

South Korea’s leading auto conglomerate Hyundai Motor Group will also invest a total of 33.5 trillion won ($29.2 billion) in future mobility, including the EV segment. By company, Hyundai Motor Co. will invest 10.8 trillion won ($9.4 billion) in the EV segment by 2025 and Kia Corp. will invest more than 10 trillion won ($8.7 billion) in EVs and other future-oriented businesses.  

The traditional auto giants in America have also shared plans to invest heavily in EVs. In May, Ford Motor Co. announced that it will invest $30 billion through 2025 on electric vehicles, whereas Ford’s rival General Motors Co. (GM) in June also shared its $35 billion investment plan by 2025.

Ford will build EV battery plants in the US in partnership with SK Innovation Co., whereas GM and LG Energy Solution Ltd. are making their second EV battery plant in the US state of Tennessee.

Global auto industry analysts highlight that the world’s largest motor groups are funneling heavy sums of funds into the still-nascent EV segment due to both the absence of a dominant market leader and the positive EV market outlook. 

According to the International Energy Agency (IEA), there will be about 80 million EVs operating in the world by 2030, a figure 11.7 times higher than last year’s 6.8 million. Including plug-in hybrid electric vehicles (PHEVs), the growth rate is even higher, growing 12.1 times in the same period from 10.2 million vehicles to 124 million.

Meanwhile, a number of the world’s major countries are preparing to ban the sale of combustion engine vehicles. The Netherlands and Norway will ban such sales from 2025, Germany and the UK from 2030, Canada, China, Korea and the US from 2035, and France from 2040.

Write to Hyung-kyu Kim at khk@hankyung.com
Daniel Cho edited this article.