Electric Cars Key To Hyundai's Assault On Toyota And Volkswagen

Dec. 28, 2022 7:28 AM ET by Jay Traugott Electric Vehicles / 2 Comments

The South Korean automaker is expected to increase revenues by 21% in 2022.

Hyundai Motor Company, which consists of the Hyundai, Kia, and Genesis brands, is now the world's third-largest automaker and it intends to utilize its strong position to take on Toyota and the Volkswagen Group, the number one and two biggest carmakers, respectively.

Speaking to Bloomberg, Hyundai president and co-chief executive Jaehoon Chang said that "We're on the right track, and this year we were very strong. Our supply chain management was key. We're trying to be flexible, and optimize and protect production as much as we can in spite of the chip shortage."

Last year, HMC sold a total of 6.6 million vehicles, directly behind Toyota (10.5 million vehicles) and Volkswagen (8.9 million). For 2022, Hyundai's revenue is on track to increase by an impressive 21% for a grand total of around $108 billion.

Assuming this will be the case, Hyundai's growth rate is the highest among all automakers. What's the key to its success? Its highly ambitious electrification strategy. Over the past two years, the Hyundai Ioniq 5, Kia EV6, and Genesis GV60 have been launched and the Ioniq 6 is coming soon. A total of 31 electric vehicles are planned by 2030 from all three brands and Chang confirms the automaker remains on track to sell 1.87 million EVs each year by 2030. That's an 11% US market share and a 7% global one.

Meanwhile, Toyota still lags behind rivals with its own EV launches but continues to develop and launch hybrids and hydrogen vehicles. VW, meanwhile, continues to have some struggles with its EV lineup. Hyundai, however, is not without problems of its own.

For example, the Inflation Reduction Act could hurt its EV sales because the law requires EVs to be manufactured in North America. The Ioniq 5, for example, is assembled in South Korea and exported to global markets. But Hyundai recently did just announce the construction of a new $5.5 billion EV and battery factory in Georgia.

The report notes that Hyundai and the South Korean government are talking to US officials for some latitude in regard to the IDA. Hyundai is still deciding what will happen to its large facility in St. Petersburg, Russia and it intends to "sharpen" itself in China where it aims to move further upmarket.