Hyundai Motor Company announced an updated roadmap for its future business Strategy 2025 at the 2020 CEO Investor Day’\ forum held virtually in Seoul. The comprehensive mid- to long-term strategy reinforces Hyundai’s plan to lead the future mobility industry as a Smart Mobility Solution Provider.

The updated Strategy 2025 roadmap is supported by three key pillars: Smart Mobility Device and Smart Mobility Service—both part of the original plan revealed in 2019—as well as H2 Solution, the addition of which reflects Hyundai’s commitment to fuel cell development and commercialization.

Hyundai Motor’s updated strategy aims to achieve three major directives:

• Enhancing competitiveness of its automotive business through electrification;

• Establishing a foundation for becoming a leading mobility service; and

• Securing initiatives for a hydrogen ecosystem.

With the aim of offering innovative and comprehensive mobility experiences to customers while contributing to the development of industry-wide ecosystem, the updated focuses on four major business areas:

• Electric vehicles;

• Urban air mobility (UAM);

• Autonomous driving technologies; and

• Hydrogen fuel cell systems.

Hyundai Motor also unveiled its mid- to long-term financial goals, which include an investment of KRW 60.1 trillion (US$55 billion) by 2025, securing an 8% operating margin in the automotive sector and achieving a 5% range of global automotive market share.

Updated Strategy 2025

At the beginning of the COVID-19 pandemic, Hyundai Motor predicted the crisis would rapidly digitize the automotive industry and increase consumer demand for sustainable solutions, and speed up the transition from fossil fuels to electrification with increased investments to hydrogen ecosystem worldwide.

For the Smart Mobility Device and Smart Mobility Service pillars of Strategy 2025, the company plans to bolster its value chain and products while accelerating its digital transformation with the aim of providing optimized vehicles and services based on data.

Hyundai also plans to launch a Smart Mobility Service business based on integrated mobility platforms. It will expand the scope of the provision of mobility services based on local communities and diversify its value-added business model utilizing vehicle data.

For its new H2 Solution pillar, the company will accelerate its hydrogen ecosystem initiative by upgrading fuel cell system technology and expanding fuel cell business beyond the development of fuel cell vehicles. The company plans to expand application of its fuel cell system in all transportation areas such as ships, trains, forklifts and UAMs.

Electric Vehicles. Starting with the launch of IONIQ 5 in 2021, Hyundai plans to sell 560,000 EVs per year by 2025. The company expects to introduce more than 12 BEV models, including BEVs built upon E-GMP, Hyundai Motor Group’s platform for dedicated EVs.

In the mid- to long-term, Hyundai aims to secure leadership in the EV market and achieve 8-10% share of the global EV market by 2040. Starting from 2030, the company will gradually expand BEV offerings in key markets such as the US, Europe and China, eventually aiming to electrify its product lineup fully in major global markets by 2040. It will also support democratization of EVs in emerging markets such as India, Russia and Brazil with more diverse EV models.

To achieve this goal, Hyundai will seek to secure manufacturing competitiveness through increased parts standardization and reduced cost. To meet diverse needs of regional customers, the company plans to pursue regionally-optimized EV product operation strategies.

Hyundai will also make efforts in charging infrastructure as well as battery businesses. The company plans to build 20 high-speed charging stations in Korea by 2021. Overseas, it will continue to carry out high-speed charging network projects with various partners, such as high-speed charging network projects in collaboration with IONITY in Europe.

For the Genesis luxury brand, Hyundai will introduce a dedicated BEV model and a derived EV model in 2021. Following the Korea and US markets, Genesis plans to expand its presence in China and Europe to build awareness and demand for the eco-friendly luxury brand.

Urban Air Mobility (UAM). As a Smart Mobility Solution Provider, Hyundai Motor will continue developing UAM, an innovative means of transportation that will help reduce urban congestion and improve people’s quality of life.

At CES 2020 in January, Hyundai presented its vision for future mobility by introducing the UAM concept model, ‘S-A1’, which is being developed based on four principles: safe, quiet, affordable and human-centered. (Earlier post.)

To take the lead in the UAM market, Hyundai Motor will build a family of air vehicles that covers both passenger and cargo transportation sectors.

The company plans to introduce air cargo Unmanned Aircraft System (UAS) with hybrid powertrain in 2026, and launch an all-electric UAM model optimized for intra-city operations in 2028. In the 2030s, the company plans to launch regional air mobility that connects adjacent cities.

From the initial stage of development, Hyundai will design its UAM models with a focus on scalable commercial production. In addition, the company plans to develop hydrogen powertrain for aviation using Hyundai’s own fuel cell technology that can offer unrivaled efficiency and flight range.

Hyundai will continue to collaborate with diverse parties in both private and public sectors to create a safe and efficient UAM ecosystem that is acceptable to the general public.

Autonomous Driving Technology. Hyundai Motor is speeding up its efforts to develop autonomous driving technologies, especially in the area of sensor fusion and an integrated controller.

Hyundai has been applying sensor fusion technology that integrates, and processes information collected from various sensors such as cameras and radars. The company will add more cameras and start using lidars on mass production vehicles to further improve recognition accuracy.

Hyundai is developing a next-generation integrated controller by adding high-performance processors to its existing controller. Various advanced technologies, such as level 3 self-driving technology, self-parking functions and deep learning-based image recognition technology, can be applied with this next-generation controller. In particular, Over-the-Air (OTA) update function will be applied based on this unit from 2021. Feature on Demand (FoD) will also be introduced.

Starting from 2022, Hyundai plans to offer models equipped with level 3 autonomous driving technology. In addition, the company will accelerate commercialization of level 4 and 5 technologies through collaboration with partners around the globe.

The establishment of Motional Inc., a joint venture between Hyundai and Aptiv lnc., is part of Hyundai’s efforts for global cooperation. Hyundai plans to continue its cooperation and strategic investment on global companies in the US, China, and Israel, while continuing its in-house efforts to advance self-driving technologies for various applications.

Fuel Cell Systems. Hyundai today also introduced HTWO, a new brand to represent the company’s world-leading hydrogen fuel cell system. (Earlier post.) Building upon Hyundai’s 20-plus years of experience in hydrogen fuel cell technology, the brand will present hydrogen as a positive energy for humanity.

With HTWO, Hyundai Motor is stepping up efforts for the development of a next-generation hydrogen fuel cell system that can be applied to various forms of mobility such as UAM, automobiles, vessels and trains. Not only will the next-generation fuel cell system be available for many different mobility products and services, it will deliver enhanced performance and durability at an affordable price in a lighter architecture with enhanced energy density. With its next generation fuel cell system, the company aims to offer a highly efficient and diversified lineup of hydrogen-powered vehicles.

Financial Targets. Under the Strategy 2025 roadmap, Hyundai disclosed updated mid- to long-term financial goals—running from 2020 through 2025—including an investment of KRW 60.1 trillion by 2025, 8% operating margin in the automotive sector and a 5% level of global automotive market share. This is an upgrade of the plan announced in December 2019 and will be carried out despite deteriorated market conditions due to the pandemic.

Out of the total, KRW 36.6 trillion (US$33 billion) will be allocated for R&D and capital expenditures to enhance competitiveness in existing businesses, while KRW 23.5 trillion (US$21.6 billion) will be dedicated to future technologies, including electrification, hydrogen fuel cells, UAM, autonomous driving, mobility service and platform, connectivity, AI and robotics.

In particular, investment into electrification and hydrogen businesses increased significantly to KRW 14.9 trillion (US$13.7 billion) from KRW 10.4 trillion (US$9.6 billion) announced last year due to the full-scale implementation of the hydrogen business and the expansion of the EV lineup.

Despite uncertainty in the global market caused by COVID-19, Hyundai Motor will continue to pursue its 8% target for operating profit margin in the automotive sector by 2025 through cost innovation to lay the foundation for sustainable future growth.

In the case of internal combustion engine vehicles, for which global demand is expected to recover after COVID-19, the company will focus on recovering profitability on the back of wider adaption of third-generation platforms in various models, optimization of production at regional headquarters, retail innovation and global expansion of the Genesis luxury brand.

For EVs, the company aims to bolster competitiveness at all stages of EV businesses throughout development, production and sales to achieve profitability comparable to that of ICE.

The company also strives to enhance shareholder value through market-friendly return policy. Despite concerns over uncertainties in the business environment in 2021, the company plans to consider annual dividends in deliberation of liquidity and earnings recovery.