Hyundai Motor will invest about 61.1 trillion won ($51.81 billion) between 2020 and 2025 in a new strategy roadmap that includes investments in electric and fuel cell cars, autonomous driving, flying taxis and mobility services.
The “Strategy 2025” roadmap aims to place Hyundai among the world’s top three makers of battery and fuel cell vehicles, with annual sales of 670,000 electric cars, comprising 560,000 full-electric and 110,000 fuel-cell vehicles.
The goal is to electrify most new models by 2030 in key markets such as the U.S., Europe, China and Korea, with emerging markets such as India and Brazil following suit by 2035, Hyundai said on Wednesday.
The Genesis brand will launch its first full-electric models in 2021, then expand its electric lineup in 2024. The high-performance N brand will launch SUVs and EVs, the automaker said.
A new global modular EV architecture will enhance efficiency and scalability of product development, starting with vehicles being launched in 2024, Hyundai said.
Hyundai also said it will transition into smart mobility solution provider by 2025 with two pillars:
1. Mobility services. These will offer personalized services and contents on integrated platform. In the U.S., the automaker will test Level 4 or higher autonomous car-sharing and robotaxi services. In Europe, the company will first focus on businesses that combine products and services. In Korea, Asia, and Australia, Hyundai will partner with local mobility service players.
2. Mobility devices. These will expand the company’s products beyond automobiles to include air taxis, robotics and last-mile mobility. Hyundai is looking at developing flying cars, which could be commercialized ahead of the most advanced self-driving cars, its executive vice chairman, Euisun Chung, has said.
The “Strategy 2025” roadmap should create a more profitable business with a global market share of 5 percent in 2025, up from 4 percent in 2018, according to Hyundai.
Hyundai wants to widen its operating margin to 8 percent in 2025 — up from 2.5 percent last year — a level that would make the company among the world’s most profitable automakers.
BMW has a margin of 9.3 percent and Toyota Motor 8.2 percent, according to data compiled by Bloomberg, with most other global automakers in the 2 percent to 6 percent range.
The transformation will come at a price. Some 27.9 trillion won of costs, the equivalent of $23 billion, will be stripped out of the company in the next three years alone, Hyundai said.
The company said it plans to cut raw material costs by 34.5 trillion won through 2022.
Hyundai, like its rivals worldwide, faces an expensive future of lower-emissions, battery-powered vehicles in a tectonic shift in vehicle technology.
Most traditional automakers are heading in the same direction as Hyundai, and all-electric rivals such as Tesla have a technological head start.
German automakers are set to invest $45 billion in electric vehicles over the next three years, while General Motors is pushing ahead with a plan to sell 20 EV models by 2023.
At the same time, trade-war tariffs hang over decades-old supply chains that serve a dwindling market.
All told, automakers are cutting more than 80,000 jobs in coming years, according to data compiled by Bloomberg News. The industry will produce 88.8 million cars and light trucks this year, an almost 6 percent drop from a year ago, according to researcher IHS Markit.
Reuters and Bloomberg contributed to this report