Auto giant allocates almost half of investment to R&D
Hyundai Motor Group on Thursday announced its largest-ever annual investment of 24.3 trillion won ($16.65 billion) in Korea to secure and advance key technologies while increasing its production capacity for electric vehicles.
The Korean auto conglomerate’s financial commitment for this year increased by 3.9 trillion won, or 19 percent, from the previous year. Hyundai Motor said it decided to make the larger investment this year to overcome ongoing challenges and secure future growth engines amid growing uncertainties.
Hyundai Motor Group Executive Chair Chung Euisun said the automaker has continued to push for change and innovation and that it's in the conglomerate's DNA to be able to overcome difficulties in a New Year’s speech delivered at Hyundai Motorstudio Goyang in Gyeonggi Province on Monday.
“We are facing adversity in many aspects right now,” said Chung. “But we are going to do what we do well, and there has not been a time when there was no crisis … From a different point of view, adversity is something we should be thankful for as it pushes us to become better. So if we proactively accept (adversity) and get through it, we will find ourselves in a higher position.”
According to Hyundai Motor, 11.5 trillion won will be invested in research and development, 12 trillion won will go to expanding infrastructure, and 800 billion won has been set aside for strengthening future business competitiveness.
In the R&D sector, Hyundai Motor plans to utilize the investment for bolstering product competitiveness while developing automation, software-defined vehicles, or SDV, and hydrogen-related products. The automaker will focus on developing hybrid vehicles with excellent fuel efficiency, next-generation hybrid systems and extended-range electrified vehicles, or EREV, to flexibly deal with fluctuating EV demand.
The R&D investment will also be allocated to the EV transition of the conglomerate's two brands, Hyundai and Kia. Hyundai Motor Company aims to establish a full lineup of 21 EVs by 2030, ranging from more affordable models to luxury, high-performance vehicles. Kia is expected to roll out a total of 15 EVs by 2027. Worldwide, Hyundai and Kia currently offer nine and seven EV models, respectively.
In terms of SDV, the automaker looks to complete the development of what it calls a “Pace Car” equipped with high-performance electric and electronic architecture by 2026 by integrating software into the vehicle and applying the technology in mass-production.
Hyundai Motor plans to complete the construction of the Kia Hwaseong EVO Plant -- the brand’s first factory dedicated to purpose-built vehicles, or PBV -- in Gyeonggi Province in the second half of this year. The automaker is also on pace to begin operation of its EV-dedicated plant in Ulsan in the first half of 2026.
The 800 billion won investment for bolstering future business competitiveness will be used for developing next-generation technologies such as autonomous driving and artificial intelligence. The automaker noted that it will continue to improve its hydrogen capabilities by developing hydrogen buses and trucks, as well as establishing hydrogen chargers. Hyundai Motor will also invest in developing new mobility devices and enhancing its robotics businesses.
Of the investment, 16.3 trillion won will be spent in the automotive sector while 8 trillion won will be used for the conglomerate’s other business areas such as parts, steel, construction and finance.
Hyundai Motor said it announced the investment as part of its efforts to bolster communication with stakeholders including customers, shareholders and markets, and to build trust.
“To realize humanity’s dream of ‘safe, free mobility and peaceful life,’ we will continue to carry out bold investments, unshaken by internal or external business circumstances, making constant efforts to improve and consistently securing future growth engines through change and innovation,” said a Hyundai Motor Group official.
By Kan Hyeong-woo (hwkan@heraldcorp.com)
