Hyundai Motor eyes thrust on electric vehicles in $52bn investment plan
INTERNATIONAL - Hyundai Motor plans to invest about 61.1 trillion won ($51.81 billion) between 2020 and 2025, the company said on Wednesday, with a third of the expenditure focused on electric and autonomous vehicles, but analysts want to see it deliver.
The South Korean car maker unveiled a “Strategy 2025” roadmap that envisages annual average spending of 10 trillion won, exceeding that of previous years, and up from a 2018 figure of 6.1 trillion won.
Shares in Hyundai rose as much as 2% on the news, only to give up most of their gains by the close of trade, with analysts waiting to see how its intentions translate into action.
“Its announcement of investment plan and goals is full of good words, but not real results yet,” said Lee Han-joon, an analyst at KTB Investment & Securities. “The plan itself also wasn’t an amazing one.”
South Korea’s top automaker is accelerating efforts to catch up in the race to bring self-driving cars to market.
Hyundai Motor is also looking at developing flying cars, which could be commercialized ahead of the most advanced self-driving cars, its executive vice chairman, Euisun Chung, has said.
Ensuring survival is a key task as the auto industry’s shift towards zero-emission and self-driving technology requires massive investment at a time of profit pressured by slowing growth, Hyundai said in a presentation to investors.
Hyundai aims to devote about 20 trillion won of the total investment, spread across six years, to future technologies.
It also set an ambitious deadline of 2025 to place itself among the world’s top three makers of battery and fuel cell vehicles, with annual sales of 670,000 electric vehicles, including 560,000 battery-based cars.
Hyundai plans to cut raw material costs by 34.5 trillion won through 2022.
“So, the goal is set, now results should be good, with good products being delivered,” said Kim Jin-woo an analyst at Korea Investment & Securities.
“That’s when investors will make a decision about their bets on Hyundai.”