Hyundai Motor looks forward to electric vehicles in $52bn investment plan

The South Korean multinational automotive manufacturer Hyundai Motor, has recently taken steps to invest about 61.1 trillion won ($51.81 billion) between 2020 and 2025, with a third of the expenditure focused on electric and autonomous vehicles, but analysts want to see it deliver.

Hyundai Motor revealed 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.

Noting this, the 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.

An analyst at KTB Investment & Securities Lee Han-joon said, “Its announcement of investment plan and goals is full of good words, but not real results yet, the plan itself also wasn’t an amazing one.”

The automotive manufacturer is accelerating efforts to catch up in the race to bring self-driving cars to market.

Explaining further, its executive vice chairman, Euisun Chung, said Hyundai Motor is sorting for ways to develop flying cars, which could be commercialized ahead of the most advanced self-driving cars.

In Hyundai’s presentation to investors, it said, ensuring survival is a key task as the auto industry’s shift towards zero-emission and self-driving technology requires massive investment at the time of profit pressured by slowing growth.

Explaining further, 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. It plans to cut raw material costs by 34.5 trillion won through 2022.

An analyst at Korea Investment & Securities Kim Jin-woo, said, “So, the goal is set, now results should be good, with good products being delivered.”

“That’s when investors will make a decision about their bets on Hyundai.” Kim Jin-woo added.