Hyundai is about to tip the balance toward electrification. The South Korean manufacturer has made several recent announcements that signal that it could soon set a date to say goodbye to internal combustion engines, as other manufacturers have already done.
Smart recently transformed into an electric car brand, Jaguar Land Rover announced in February that its Jaguar brand cars will be solely electric from 2025, while Volvo said in March that it will build only electric cars from 2030.
So far, premium brands are the ones that have dared to make the leap, while most manufacturers competing in the volume market have one foot on electrification but keep the other on fossil fuels. The reason is simple: Saying goodbye to gasoline and diesel will be viable until the cost of batteries drops enough that they can offer electric vehicles at prices similar to what their models with internal combustion engines now have.
Hyundai knows that manufacturers who manage to match or even lower the cost of production of electric models before others will gain a good slice of the market, and it has put in place an aggressive plan to be one of the first to do so.
Last week it introduced the first of 23 battery models it will launch in the next five years: the Ioniq 5. Two other models, the Ioniq 6 sedan and the Ioniq 7 SUV, are next on the launch schedule.
The first electric models to be sold by Hyundai in North America will be imported, but the automaker “will offer US-made electric vehicles starting next year,” the company recently said in a statement.
To achieve this, the South Korean manufacturer announced this month a $ 7.4 billion investment to produce future electric vehicles in the United States, improve production facilities and promote its investments in smart mobility solutions.
Hyundai will have to cut investments in combustion engine development to free up resources for electric vehicles. A related source recently told Reuters that the South Korean manufacturer could cut fossil fuel-powered models in half, without giving a timeline for the plan.
Although Hyundai has not yet announced a date to definitively say goodbye to internal combustion vehicles globally, it has launched some concrete goals for some markets. In April, for example, it said it would reduce the number of its gasoline models in China from 21 to 14 by 2025, while launching new electric models every year starting in 2022.
What will happen in Mexico?
Although Hyundai’s regional corporate in North America has made it clear that the brand will bet heavily on electrification in the region in the next five years, the US market will be the first to see the technological migration that the South Korean manufacturer will make.
The brand’s first electric model, the Ioniq 5, will hit American retail floors in the fall.
“When will it arrive in Mexico? We are looking for the right way and strategy to bring it in. It has to be at the right time, because launching an electric requires a recharging infrastructure, investment by distributors and even a favorable economic situation. Yes it will arrive (in Mexico), it is only a matter of time, ”Claudia Márquez, CEO of Hyundai in Mexico, said at a conference.
While in the United States the brand will launch hybrid, plug-in hybrids and electric models simultaneously, in Mexico the strategy will be rather progressive. Hyundai has already offered a hybrid model in the country, the Ioniq, for five years, and in the following years the brand will focus on expanding the offer of this type of model, before launching an electric one.
“The next step in Mexico are hybrid vehicles, due to consumer habits. Hyundai globally has a hybrid offensive and we are doing an analysis to bring in those that make sense for the market. Now the priority is gasoline models and hybrids, “said Juan Carlos Ortega, marketing director for Hyundai in Mexico.
