Who is this rival?
Hyundai is done watching Tesla dominate the battery electric vehicle market. Although the South Korean automaker already sells the popular Hyundai Kona EV, and there are more EVs in development, Hyundai knows that more investment in EVs is required. Several years ago, Hyundai was one of the first major automakers to work on hydrogen cars, but the situation has now changed. It's not that hydrogen fuel cell vehicles won't gain in popularity, but battery electrics are the dominant propulsion system right now and for the foreseeable future. Also, Hyundai doesn't like seeing shiny new Teslas driving around its home country.
Reuters reports Hyundai has a new plan to introduce not one but two production lines dedicated solely to EVs. The first one is scheduled to begin operations next year while the other will go online in 2024.
Hyundai Motor Company, which includes its namesake Hyundai division along with Kia and Genesis, has also been reportedly holding talks with fellow South Korean companies Samsung, LG, and SK Group, all of whom design and manufacturer batteries. These battery supplier discussions are critical because Hyundai needs to quickly secure enough batteries as the EV battle enters a new phase. There's simply not enough batteries at the moment and automakers are competing to sign battery supplier contracts. What Hyundai aims to do is work directly with those fellow domestic battery suppliers "to scale up" is electric vehicle production more efficiently.
Earlier this month, Hyundai executive chairman Euisun Chung announced a goal of selling 1 million battery EVs a year by 2025. It also hopes to achieve a global market share of more than 10 percent that year.
A lot needs to happen between now and then to achieve that. For example, Hyundai sold 86,434 battery EVs last year. Tesla sold 367,500 that year. But why has it taken this long for Hyundai to take Tesla seriously? One reason: the Tesla Model 3. Up until its 2017 launch, Tesla only built expensive luxury vehicles, but the Model 3 has now become the world's best-selling EV in history.
And now it's becoming even more popular in Hyundai's home turf, South Korea. "Hyundai did not expect Tesla to dominate the EV market so quickly," one person familiar with the company's thinking said.