Hyundai Motor Co. is taking a proactive approach to the changing landscape of the automotive industry by doubling its lineup of hybrid cars. With demand for pure electric vehicles (EVs) slowing down, the South Korean automaker aims to expand its hybrid offerings to 14 models, including large and luxury vehicles. The move comes as other major car manufacturers, such as Ford, Porsche, and Mercedes-Benz, have also adjusted their EV ambitions. Tesla, the leader in the EV market, has also fallen short of its sales target.
Hyundai’s decision to focus on hybrids is a strategic move to maintain its path to EVs while addressing some of the challenges hindering the widespread adoption of electric vehicles. Hyundai’s CEO, Jaehoon Chang, acknowledged the need to improve charging infrastructure and tackle range anxiety issues with improved technology. To alleviate range anxiety, Hyundai plans to introduce an extended-range EV in North America and China. This type of vehicle utilizes a small gasoline engine to charge the battery while driving, extending the range to more than 900 kilometers (560 miles) on a single charge. By offering this alternative, Hyundai aims to address the concerns of consumers who are hesitant to purchase EVs due to charging limitations.
While the rate of electrification may be slowing, Hyundai recognizes the importance of adhering to stricter environmental regulations and staying ahead of the curve. The automaker plans to gradually increase its EV models by 2030, anticipating a recovery in EV demand. In the meantime, the company plans to capitalize on the robust sales of its hybrids, which accounted for approximately 12% of total vehicle sales in the second quarter of this year. These strong hybrid sales have propelled Hyundai’s profits to a record high.
To support its long-term strategy, Hyundai announced a 4 trillion won ($3 billion) share buyback and committed to paying a minimum annual dividend of 10,000 won per share. This move aims to boost investor returns and target a total shareholder return of 35% from 2025 to 2027. The market responded positively to these announcements, with Hyundai’s shares surging up to 5.5% and closing up 4.7% on the day of the investor presentation.
Hyundai’s commitment to investing in the future is evident in its plans to spend 121 trillion won over the next decade. This investment will focus on boosting production, as well as making advancements in hydrogen cars, EV batteries, and software for future mobility. Additionally, Hyundai plans to produce hybrids at its EV plant in Georgia, USA. Although the construction of the plant recently faced a setback with potential reassessment of its environmental permit by the US federal government, Hyundai remains optimistic about the future.
Overall, Hyundai’s strategy to expand its hybrid lineup demonstrates its adaptability and forward-thinking approach in an evolving industry. By recognizing the current slowdown in EV demand and addressing consumer concerns through extended-range EVs, Hyundai aims to ensure continued growth and success. The company’s investments in production and technological advancements further underscore its commitment to environmental sustainability and future mobility. As Hyundai prepares for the future, its focus on hybrids positions it well to navigate the changing landscape while maintaining a path towards EVs.
