Hyundai Motor Will Halt One Of Its ICE Vehicle Factories To Build A New EV Plant
2024 Hyundai Ioniq 5
Other manufacturers claim their EV sales are slow due to weak demand. So how come Hyundai is charging ahead?
Hyundai Motor, the company that owns and operates the Hyundai, Kia, and Genesis car brands, will pause operations at one of its South Korean factories to focus its attention on building a brand-new electric vehicle plant.
According to Reuters, citing a regulatory filing, the East Asian automaker will halt its factory in Asan between December 31, 2023 and February 13, 2024. The Asan facility is described on the company’s website as being a “state-of-the-art self-sufficient factory” that manufactures passenger vehicles for export and operates an “environment-friendly solar farm on rooftops.”
Hyundai makes the Sonata and Grandeur combustion models here, but also the Ioniq 6 electric sedan.
The car group’s efforts will be directed toward the construction of a new EV-only plant at its main manufacturing complex in Ulsan, which is on the other side of the Korean peninsula. The Ulsan facility is the world’s largest single automobile plant, according to Hyundai Motor, comprising five independent plants that make cars like the Hyundai Kona, Santa Fe, and Tucson, as well as Genesis models like the GV80 and G90, among others.
The EV-only manufacturing facility will become the sixth plant at the Ulsan complex and–once it goes online in 2026–will be responsible for assembling the all-new Genesis GV90 flagship electric SUV.
As reported by The Korean Car Blog earlier this month, the GV90 will be the group’s first model based on the new Integrated Modular Architecture (IMA) that’s designed to simplify the assembly processes and lower costs.
But when everything is said and done, how come the Korean auto group is marching ahead with its EV plans, while other names like Ford, General Motors, and Volkswagen are citing weak demand for battery-powered cars and slowing down their momentum?
Ford said that its Michigan battery plant will be smaller than initially planned, with an annual output of 20 gigawatt-hours instead of the originally planned 35 GWh. Additionally, construction at one of the two EV battery plants in Kentucky has been delayed.
On the same pessimistic note, GM delayed the market launch of the Equinox EV crossover, as well as the production of some Chevrolet Silverado EV and GMC Sierra EV models until late 2025. Volkswagen slowed production at one of its European EV factories more than once because of less-than-stellar sales results and its CEO recently went on record saying that the people’s car brand has to tie up a lot of loose ends because it’s no longer competitive.
Hyundai Motor, on the other hand, outpaced all of its competitors except Tesla in terms of EV sales in the United States in the third quarter with over 28,000 battery-powered cars reaching customers. By comparison, Ford sold a smidge under 21,000 EVs while the Volkswagen Group and General Motors sold about 20,000 each.
Hyundai Motor Group was also ahead of all the other legacy automakers in the first three quarters of the year with approximately 62,000 EVs sold in the US, ahead of GM with 56,000 and the Volkswagen Group with almost 50,000 units.
In other words, it shouldn’t be a surprise that the Korean company is keeping its steady pace of expansion in the EV space. If sales are good, it makes sense to pour more money into the business so that they can sell even more later.
Hyundai has pledged to invest about $5.5 billion in a new EV factory in the state of Georgia, plus an additional $3 billion for research and development. That said, the Ulsan EV plant will gobble another $1.58 billion, bringing the total investment to roughly $10 billion in just a few short years.