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Tesla's success brings pressure. Hyundai launched an electric car offensive.
Jul 29,2020 08:57CST
The content below was translated by Tencent automatically for reference.

SMM: according to reports, after witnessing the rise of Tesla electric vehicles, Hyundai, which has been paying attention to hydrogen-fueled vehicles, is also ready to launch an electric car offensive. Hyundai plans to launch a production line next year and 2024 to produce electric cars, according to a notice from the union within Hyundai.

Since May, Zheng Yixuan (Euisun Chung), head of Hyundai Group, has held several meetings with the heads of battery and electronic components manufacturers such as Samsung, LG Chemical and SK Group. According to industry insiders, the purpose of the meeting is to protect Hyundai's battery supply when competition for electric vehicles intensifies and battery supply is tight. These manufacturers are also suppliers to auto companies such as Tesla, Volkswagen and GM. Hyundai declined to comment on the planned electric car production line, while Samsung, LG Chemical and SK also declined to comment.

Hyundai has said it is working with South Korean battery suppliers to efficiently "increase" the production of electric vehicles. This series of actions means that Hyundai has taken strong action to expand the production capacity of electric vehicles. On July 14, Zheng Yixuan also announced that Hyundai plans to sell 1 million electric cars in 2025, grabbing more than 10 per cent of the global market share.

However, Hyundai still has room to rise in the field of electric vehicles. Hyundai Kia, the world's fifth-largest carmaker, said it had the strength to attack the electric car sector, adding that "we are sure that Hyundai will never lag behind".

A Hyundai executive said that when Tesla started producing high-end cars, it did not cause the company's concern. But when Tesla launched the lower-priced Model 3 in 2017, the company began to worry. He called Tesla's success a "strategic victory". No traditional carmaker has been as successful as Tesla and has advanced technology in battery and software technology.

Hyundai may also face obstruction from trade unions. Because electric cars need fewer parts and fewer workers than cars with internal combustion engines, unions worry that this will lead to job insecurity, in part because Hyundai makes a large number of key parts of traditional cars. and many electric car parts are outsourced to other suppliers. The union strongly supports the company's internal assembly of key electric vehicle parts, such as battery packs and engines, so that layoffs can be avoided. "We are not against the electric car business," said Kwon Oh-kook, a union spokesman. When the industry turned to digital photography, Kodak went bankrupt because it stuck to its film business. We just want to protect the employment of union workers. " Hyundai believes that for long-term development, both automakers and unions need to accelerate the pace of change.

In 2010, Hyundai produced 230 electric vehicles for the government, but they were eventually sealed at a research center on the outskirts of Seoul because of a lack of charging facilities, according to Lee Hyun-soon, then head of research and development. Lee, South Korea's first-generation gasoline engine developer, commented in a 2014 book that such electric cars were "unrealistic" and mentioned high battery costs, while hydrogen-powered cars provided a "bright" future.

Like Toyota and Nikola, Hyundai is one of the few carmakers that support hydrogen-powered cars. The company launched the industry's first hydrogen-producing vehicle, the Tucson Fuel Cell, in 2013 and the NEXO in 2018.

However, the technology has not been a great success. Last year, 7707 hydrogen fuel cell vehicles were sold worldwide, compared with 1.68 million battery electric vehicles. In South Korea, Tesla's sales hit a record high in June, with its Model 3 beating Hyundai's Kona electric car and high-end models from BMW and Audi.

"Modern didn't expect Tesla to dominate the electric car market so quickly," said another person familiar with the matter. " Hyundai has a market capitalization of about 25.3 trillion won ($21.2 billion), less than 25.3 trillion won ($21.2 billion) of Tesla's. Tesla is currently the world's largest carmaker by market capitalization.

Although Hyundai has partnered with South Korean popular bulletproof youth group (BTS) to promote its hydrogen-powered cars, the company plans to launch up to two hydrogen-powered models and 23 electric models by 2025. Peter Hasenkamp, vice president of Lucid, an electric car start-up that used to work for Tesla and Ford, says established carmakers face historical "inertia" in transforming into electric vehicles. "We are headquartered in Silicon Valley in part to take advantage of software and electrical engineering expertise. Auto giants need generations to learn how to do a good job, which is much more difficult than they think.

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