Korea's Hyundai Investing $16bn To Produce 1.87m EVs A Year

South Korea’s Hyundai Motor Co plans to invest about 95.5 trillion won ($79.2 billion) through to 2030, the company said on Wednesday, including about 19.4 trillion won ($16.1 billion) towards electric vehicle (EV) related businesses.

Hyundai Motor – which together with affiliate Kia Corp is among the world’s top 10 biggest automakers by sales – is targeting a 7% market share in the global EV market by 2030, with an annual sales target of 1.87 million vehicles, it said during a virtual investor day.

The Seoul-based automaker said it aimed to achieve an operating profit margin of 10% or higher in EV business by 2030.

“Hyundai is successfully accelerating its transition to electrification and becoming a global leader in EVs despite a challenging business environment caused by the global chip shortage and ongoing pandemic,” Hyundai Motor chief executive officer Jaehoon Chang said.

‘Less Than Toyota’

Analysts, however said Hyundai‘s $16 billion investment in EV business would not be considered an “aggressive” approach compared to its rivals, adding that the investment is dwarfed by bigger rivals including Toyota, which plans to invest 8 trillion yen ($69.43 billion) for electrification by 2030.

“Hyundai is allocating about 20% of its 95.5 trillion won investment to EV-related businesses, which includes building new plants, EV charging stations and strategic alliances with battery manufacturers and the investment amount for EV does not seem too surprising or aggressive,” Eugene Investment & Securities analyst Lee Jae-il said.

Chang said Hyundai was considering building new dedicated EV production plants without providing details of new factories, including locations and timeline.

Analysts said Hyundai would be looking to build dedicated EV factories in the United States, as it considers that as its key EV market.

Shares in Hyundai Motor closed down 2.6%, compared to the benchmark KOSPI’s 0.2% gain.

• Reuters with additional editing by Jim Pollard