Late bloomer Hyundai speeds past BYD in electric vehicle sales

SEOUL — Hyundai Motor, once a perennial also-ran in next-generation autos, has rapidly gained ground against rivals, surpassing Chinese peer BYD to take fourth place in the global electric vehicle market.

The South Korean automaker held an 8% market share in the first quarter of this year, selling 24,000 vehicles, compared with BYD’s 6%, according to data from EV Sales.

Tesla maintains a commanding lead with a 29% market share. But Hyundai is closing in on Volkswagen’s 11% share, as well as the 13% slice held by the Nissan Motor-Renault alliance.

The growth is credited to reforms introduced by Chairman Chung Euisun. After becoming executive vice chairman in 2018, Chung abandoned the company’s all-in-one approach to green vehicles, which covered all varieties including hybrids, plug-in hybrids and fuel cell vehicles, and set his sights on electric cars.

With competitors scrambling to adapt to stricter global environmental standards, Chung saw the need to concentrate resources on a particular vehicle type.

“To cement our leadership in the market, we plan to offer 44 eco-car models by 2025… by bolstering the development of EV platforms and core components,” Chung said in this year’s New Year’s address.

The 44 models include 23 fully electric models, greatly expanding the current lineup of nine. Hyundai will boost electric vehicle output 10 times to 1 million units by 2025.

The goals fall short of Volkswagen, which plans to sell 2.5 million electric vehicles by 2025, and release 75 models by 2029. But Hyundai is more ambitious than Toyota Motor, which looks to sell 500,000 electric vehicles by 2025.

Hyundai was the seventh leading electric vehicles seller in 2018, improving to sixth place in 2019. But the company owes its current fourth place in part to the struggle of Chinese rivals, which were hit by subsidy cuts and the pandemic.

Hyundai will need to invest additional resources over a long term. Funds spent on research and development, as well as on outside partnerships, will be raised 30% this year to 7.9 trillion won ($6.6 billion) and to 10 trillion won in 2025.

Hyundai has reached out to major suppliers of core components. Chung visited an LG Chem‘s Ochang EV battery plant last month to meet his counterpart, LG group Chairman Koo Kwang-mo. The two exchanged ideas on vehicle battery development.

A key initiative under way is the Electric-Global Modular Platform, which will be shared across several different models and help speed up the development of new vehicles.

In addition to LG Chemical, Chung has visited Samsung SDI and SK Innovation to get all three of South Korea’s big battery makers on board with its long-term EV strategy. Securing enough batteries has been an issue in the field as automakers fight to expand business.

Hyundai is also actively pursuing partnerships to advance its EV-related technology. It invested 100 million euro ($113 million) in Arrival, a British startup focused on commercial electric vehicles, in January, with plans to use its know-how to modularize smaller delivery vehicles.

Hyundai has long been a “fast follower” that can quickly react to market trends in the industry. It has sometimes churned out new models in half the four- to five-year time frame usual for most automakers. It aims to leverage its quickly adaptability in electric cars as well.

“The shift to EV is not only in line with environmental regulations, but will serve as a foundation for next-generation technologies, like autonomous vehicles,” said SK Securities analyst Kwon Soon-woo.

But Hyundai’s relatively small footprint and reluctance to partner with industry rivals could hold it back. The auto industry in general tends to have economies of scale — a trend expected to be even stronger for electric vehicles, since they feature many modular parts. Many of the other big automakers are joining hands to develop electric vehicles more efficiently.

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