Thu, Dec 05, 2019 - Page 10 News List

Hyundai to pour US$17bn into EV, autonomous tech

Bloomberg

Hyundai Motor Co’s Ioniq electric car is displayed at AutoMobility LA in Los Angeles on Nov. 21.

Photo: AFP

Hyundai Motor Co is to spend 20 trillion won (US$17 billion) over the next six years on new technology to help make the switch to electric and autonomous vehicles.

Announcing its strategic plan to 2025, the South Korean company pledged to spend almost half the new money on electrification.

Autonomous driving would soak up 1.6 trillion won of the total, Hyundai said yesterday.

The investment forms part of a surge in spending at Hyundai, which like rivals worldwide faces an expensive future of lower-emissions, battery-powered vehicles.

Competitors, such as Volkswagen AG, have also pledged tens of billions of US dollars in investments in electrification.

If successful, the plan should create a more profitable business with a global market share of 5 percent in 2025, up from 4 percent last year, Hyundai said.

Yet most traditional automakers are heading in the same direction and all-electric rivals, such as Tesla Inc, have a technological head start. That suggests competitive pressures are not likely to subside in the next era.

German automakers are set to invest US$45 billion in electric vehicles (EVs) over the next three years, while General Motors Co is pushing ahead with a plan to sell 20 EV models by 2023.

The transformation would come at a price.

About 27.9 trillion won of costs, the equivalent of US$23 billion, would be stripped out of the company in the next three years alone, Hyundai said.

That’s part of the sacrifice being made at automakers across the world as the industry tackles a tectonic shift in vehicle technology. At the same time, trade-row tariffs hang over decades-old supply chains that serve a dwindling market.

All told, automakers are eliminating more than 80,000 jobs during the coming years, according to data compiled by Bloomberg News.

Although the cuts are concentrated in Germany, the US and the UK, faster-growing economies have not been immune and are seeing automakers scale back operations there.

The industry would produce 88.8 million cars and light trucks this year, an almost 6 percent drop from last year, according to researcher IHS Markit.

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