Hyundai to Invest $16.7 Billion in South Korea

In its largest ever investment in its home country, Korean auto giant Hyundai Motor Group on Thursday said that it will invest $16.7 billion, up 19%, from the previous year, in South Korea this year.

The investment, which was made in the face of headwinds from global economic uncertainty, geopolitical risks and local political turmoil, is aimed at advancing its future mobility technologies amid growing uncertainties in the global economy and auto industry.

The announcement came a few days after Hyundai Motor Group Executive Chairman Chung Euisun urged the executives and employees to guard against pessimism amid a perfect storm of economic crises.

Of the total amount, $7.9 billion will be spent on research and development for next-generation mobility technologies including electrification, software-defined vehicles (SDVs) and hydrogen.

The company will also use $8.2 billion in ordinary investments to expand electric vehicle production lines and build related infrastructure and about $550 million in strategic investments for autonomous driving and artificial intelligence technologies.

The Korean auto giant said it will deal with the ongoing EV chasm by releasing diverse hybrid models backed by improved performance and fuel efficiency and developing the next-generation hybrid system and extended-range electrified vehicles (EREVs).

This does not mean that it was backing down from its EV ambitions. Rather, it will continue to develop new EV models to accelerate the electrification of cars.

Hyundai Motor plans to release 21 EV models, covering a full line-up from economy to luxury and high-performance vehicles, by 2030 while its sibling Kia will build a full EV line-up of 15 models, including purpose-built vehicles (PBVs), by 2027.

It will also develop its proprietary SDV software to complete its SDV pace car project by 2026 and implement it in mass-produced cars. SDVs, often called smartphones on wheels, enable constant and seamless upgrades of a car’s functions through an over-the-air system throughout the car’s lifetime. Last year, Hyundai said it eventually aims to turn all its vehicles into SDVs.

With this year’s investment, the company will also accelerate business diversification by developing new mobility devices and bolstering the robotics business.

EV-Dedicated Plant

The auto group plans to open Kia’s new EV-dedicated manufacturing plant in Hwaseong, near the capital Seoul, in the latter half of this year. PBV EVs are expected to be manufactured at this new plant. 

This will be Kia’s second EV-dedicated plant in Korea after it opened its EV plant in Gwangmyeong, dubbed the EVO Plant, with an annual capacity of 150,000 units in 2024.

Hyundai Motor is currently building its own EV plant in Ulsan to produce new EV models, including a large-size electrified sport utility vehicle model, with an aim to kick off operations in the first half of 2026.

In March 2024, Hyundai Motor Group announced a three-year investment plan to spend 68 trillion won from 2024 to 2026 to become the leader in electrification, SDVs and future mobility.