Hyundai plans ₩61 trillion in R&D investment

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Hyundai plans ₩61 trillion in R&D investment


Hyundai Motor President Lee Won-hee speaks during CEO Investor Day held Wednesday in Yeouido, western Seoul. [HYUNDAI MOTOR]

Hyundai Motor announced a 2025 road map to invest 61.1 trillion won ($51.2 billion) in research & development (R&D) to become one of the world’s top three electric vehicle (EV) manufacturers.

Under the plan, Hyundai will focus on two core businesses: smart mobility devices and smart mobility services.

Focusing on the two sectors is intended to create synergy to push the carmaker’s transformation into a comprehensive “solutions provider” that engages in both hardware and software for smart mobility.

“We want to offer smart mobility experiences that meet the shifting needs of our customers by leveraging advanced technology,” said Hyundai Motor President Lee Won-hee during the CEO Investor Day forum held Wednesday in Yeouido, western Seoul.

“Transforming into a smart mobility solutions provider with comprehensive mobility solutions that combine devices and services will be the centerpiece of Hyundai’s future strategy.”

For its smart mobility device business, Hyundai plans to diversify its lineup to personal air vehicles, robotics and last-mile mobility - a term that includes electric scooters and bikes.

The immediate focus will be on taking the lead in the EV sector. The goal is to reach 670,000 battery and fuel-cell EV sales per year to rank within the top three manufacturers in the sectors in the world by 2025.

Key markets like Korea, the United States, China and Europe will see most new Hyundai models electrified by 2030. Emerging markets like India and Brazil will follow by 2035.

The first fully electric vehicle under Hyundai’s high-end brand Genesis will roll out in 2021.

“Smart” functions will come faster - by 2025, Hyundai vehicles will have artificial intelligence (AI) voice assistants and personalized car settings based on AI. By that same deadline, Level 2 and 3 automation and advanced driver assistance systems for parking will be included in all models.

To secure capital, Hyundai will push to enhance the profitability of its internal combustion engine vehicles.

The goal for the smart mobility service is to develop not only software or IT components, but also develop vehicle-related services including maintenance, repair, financing, insurance and charging.

Hyundai plans to develop an “integrated mobility platform” that analyzes data obtained through its connected cars. This data in turn will be used to help the company set directions in developing services with daily consumer touch points.

“Through enhanced understanding of customers, the company will offer services tailored to the needs of customers in every aspect of their lives, including shopping, delivery, streaming and multi-modal mobility services,” it explained.

As for financial goals, Hyundai is aiming for an operating margin of 8 percent in its automotive business and a 5 percent share of the global vehicle market by 2025.

At its previous CEO Investment Day forum last February, the company released a five-year plan to invest 45.3 trillion won by 2023, but the scale has been adjusted as it decided to ramp up R&D.

The new R&D budget is 61.1 trillion won between 2020 and 2025 - 20 trillion won dedicated to future technologies and 41.1 trillion won allocated to enhance competitiveness in its existing businesses.

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