Hyundai Motor to make electric cars in China

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Hyundai Motor to make electric cars in China

Hyundai Motor said Friday that it will manufacture an electric version of the Avante, also known as the Yuedong in China, at its factory in Beijing, a step many see as pre-empting China’s growing protectionism of its burgeoning electric car market.

It will be Hyundai’s first electric car in China, and the battery will be made by a Chinese manufacturer, following new rules from the Chinese government.

Hyundai Motor said the vehicle will go into production in the latter half of the year and launch by the first half of next year.

The Yuedong, which debuted in China in 2008, is a locally strategic model that has sold over 1.3 million so far. Hyundai Motor rolls out strategic models in regions that have enough domestic demand for their cars, such as in the United States and Russia.

The top automaker’s latest move to locally manufacture an electric vehicle is due to China’s growing protectionism of its green car industry. The government has grown more wary of overseas carmakers and battery manufacturers. In June, the government said it would restrict financial subsidies for electric cars that are equipped with batteries not certified by the government.

Korean manufacturers LG Chem and Samsung SDI, both of which have supplied their batteries to Hyundai Motor’s electric vehicles, submitted applications for certification but failed to make the list.

The Beijing government further drafted legislation that would mandate local carmakers contribute 8 percent of their entire production capacity to electric vehicles by next year.

Early this week, Hyundai Motor confirmed it would delay the launch of its electric Sonata version from the first quarter this year to next April because it decided to change the battery supplier from LG Chem to Contemporary Amperex Technology, a Chinese company.

China’s green car industry will be vital for any electric vehicle manufacturer in the world, considering its explosive growth backed by the government. With 507,000 sales last year, China’s market is now the world’s largest, growing rapidly from just 8,159 sales in 2011.

“If China’s auto industry completely shifts to the green car market, the paradigm of the global auto industry, which is still focused on internal combustion engine cars, will change faster than others may expect,” said Kim Yong-geun, CEO of the Korea Automobile Manufacturers Association. “Hyundai Motor should be ready for such a change.”

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