Hyundai Motor to invest $5.9 billion in domestic EV factories

Industry

Hyundai Motor to invest $5.9 billion in domestic EV factories

Published: 12 Jun. 2023, 17:21

President Yoon Suk Yeol, front left, talks with Euisun Chung, executive chair of Hyundai Motor Group, at Hyundai's manufacturing plant in Ulsan on March 9. [YONHAP]

Hyundai Motor and its related companies will invest $5.9 billion in domestic electric vehicle (EV) factories, using reserves from their overseas operations.

The Korean automaker said Monday it increased the dividends from its operations in the United States, Europe, and India by 4.6-fold and will use the dividends, totaling around $5.9 billion, to strengthen the EV ecosystem in Korea.

Hyundai Motor will receive $2.1 billion from its overseas operations including from the United States, India and the Czech Republic, while Kia will get a total of $3.3 billion from its U.S., and European subsidiaries.

Hyundai Mobis will receive $200 million, while the remainder will come from other smaller affiliates including Hyundai Glovis.

Some 79 percent of the dividends will be remitted to the headquarters within the first half, while the remainder will come by the end of the year, the company said.

“Bringing in the profits companies earned overseas to Korea is considered a type of capital reshoring,” Hyundai said in a statement.

“The dividends will help Hyundai companies cut back on bank loans, which will enhance our financial solvency and allow us to make an aggressive investment,” Hyundai said in a statement.

The funds will be used to build EV-dedicated facilities in Hyundai Motor’s Ulsan plant and Kia’s AutoLand in Hwaseong, Gyeonggi.

They will also be used to develop EV platforms and expand EV lineups for Hyundai Motor and Kia.

The investment plan came as Hyundai Motor, Kia, and Hyundai Mobis in April announced that they will invest a total of 24 trillion won ($19 billion) in their domestic EV plants by 2030.

Hyundai Motor plans to build an EV-dedicated facility at its Ulsan plant, with production set to start in the second half of 2025.

Kia in April began the construction of a 150,000-unit-a-year EV plant inside its existing factory in Hwaseong, with a goal to start production in late 2025.

Hyundai Motor and Kia plan to release a total of 31 battery-powered EV models by 2030, including the Kia EV9 this month and the Hyundai Ioniq 7 next year.

The goal is to ramp up annual domestic EV production from last year’s 330,000 units to 1.51 million by 2030, of which 920,000 units will be exported. The 1.51 million figure is about 41 percent of the global EV production target for carmakers by 2030.

The companies aim to become the three largest EV manufacturers in the world.

BY SARAH CHEA [chea.sarah@joongang.co.kr]