Hyundai Sticks to EV Rollout Plans, Sees Solid Growth This Year

Cam White | October 26, 2023

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By Heekyong Yang and Joyce Lee

SEOUL (Reuters) -Hyundai Motor said on Thursday it would not delay plans to roll out new electric vehicles and was upbeat about prospects for continued growth this year – a contrast to recent steps by rivals to cut back on EV output.

Electric vehicle sales are growing strongly but not as much as carmakers had forecast, with demand hit by high interest rates.

“We do not plan to dramatically reduce EV production or our line-up due to likely near-term hurdles as we believe EV sales will grow longer term,” Seo Gang Hyun, an executive vice president at the South Korean automaker, told an earnings briefing for analysts.

The Hyundai Motor Group, which encompasses the Hyundai, Kia and Genesis brands, said in April it plans to launch 31 EVs by 2030. This includes the launch of the Ioniq 7 SUV next year.

Seo said Hyundai’s EV sales next year could be slightly lower than previously expected, but the automaker had the production flexibility to boost output of gasoline engine cars if demand shifted that way and he did not expect a significant impact on overall sales.

When asked about the impact on Hyundai Motor of the United Auto Workers (UAW) union reaching a tentative labour deal with Ford, Seo said the company expects the deal will have an impact on wage increases at its U.S. factories, but such costs could be covered as the automaker has been putting effort into reducing costs, such as in logistics.

Hyundai Motor, which is not a member of the UAW, operates an assembly plant in Alabama and is building a factory to produce EVs in Georgia.

For the third quarter, Hyundai booked a net profit of 3.2 trillion won ($2.4 billion), more than double its year-earlier result and beating an LSEG SmartEstimate of 2.9 trillion won, with the automaker helped by a favourable exchange rate.

Sales also increased, climbing 8.7% to 41 trillion won on solid demand for high-margin gasoline SUVs. Sales of EVs and hybrids also grew, up by a third to 169,000 units.

This month has seen a flurry of downbeat EV announcements.

Citing flattening demand for EVs, GM said it would delay production by a year of Chevrolet Silverado and GMC Sierra electric pickup trucks at a plant in Michigan. Ford is temporarily cutting one of three shifts at the plant that builds its electric F-150 Lightning pickup truck.

Tesla is also slowing plans for a Mexico factory, while GM and Honda announced on Wednesday that they were ending a $5 billion plan to develop lower-cost EVs together.

Shares of Hyundai Motor closed down 1.4% after it reported earnings, outperforming a 2.7% decline for the benchmark KOSPI.

($1=1,358.3200 won)

(Reporting by Heekyong Yang and Joyce Lee; Editing by Miyoung Kim and Edwina Gibbs)