South Korean automotive behemoth Hyundai Motor expects to sell 5.5 million vehicles globally by the end of the decade, including 2 million EVs and 1.3 million hybrids. The global number represents a 30% jump over last year’s numbers.
Hyundai Motor President and CEO Jaehoon Chang laid out its plans for the remainder of the decade as part of a strategy dubbed, Hyundai Way.
Company officials laid out its plans for the remainder of the decade as part of a strategy dubbed, Hyundai Way. The targets include several adjustments to previous plans based on changing market conditions. The biggest revision being the company’s new expectations for hybrid vehicle sales.
“Recently, the speed of conversion to electric vehicles has been slowing. As a result, demand for hybrids is increasing, and hybrids are becoming a basic option rather than an alternative to internal combustion engines,” said Hyundai Motor President and CEO Jaehoon Chang, during Hyundai’s 2024 CEO Investor Day.
Not just any hybrid
Hyundai’s move to expand hybrid production mirrors that of many of its rivals such as General Motors, Ford, Volkswagen, Honda, and others. However, the company, which includes Kia also, isn’t going solely with a conventional type of hybrid or even a plug-in hybrid to meet rising consumer demand for what many see as the transition vehicle to an EV.
The Hyundai Way sees the company expanding the number of hybrids from seven to 14 in the near term.
It plans to introduce several new EREV models, a new type of EV with a range of more than 500 miles on a single charge, in North America and China. These are extended range electric vehicles.
They’ll come with much larger batteries than conventional or plug-in hybrids. However, when the battery is discharged, a small gas engine will kick on to charge the battery.
The Chevrolet Volt hybrid and a few other vehicles ran on the same principle, and Hyundai’s not the only company looking to introduce the technology on a large scale. Stellantis will use it as the basis for its range-extended vehicles as well.
Long-term product plans
Chief Operating Officer Jose Munoz noted the company could begin producing some hybrids at its new plant under construction near Savannah, Georgia.
The company plans to expand its existing hybrid portfolio from seven to 14 vehicles. That will drive the company to its target of 1.3 million hybrids annually by 2028. That’s a 40% increase compared to 2023 results.
The company didn’t outline when the new hybrids would begin arriving, but Chief Operating Officer Jose Munoz noted the company could begin producing some hybrids at its new plant under construction near Savannah, Georgia. Production could begin as early as 2026 and once the site its running at full speed, hybrids could account for up to a third of production.
He didn’t say if the EREVs would be part of that, but they are targeted to for the North American market as they offer a significant price advantage over full battery-electric models. That helps the company meet its financial targets.
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More money
“By launching hybrids, EVs, EREVs differentiated from other brands, we plan to improve both average profitability and operating margins for each powertrain,” said CFO Seung Jo Lee during the event.
“We will continue to pursue a profit-oriented strategy to achieve a mid- to long-term operating margin of 10% or more, which is the basis for the expansion of the shareholder return policy.”
The company expects to achieve equal profitability on its entire powertrain lineup, including ICE, hybrids, EREVs and EVs by 2030.
That policy, technically called total shareholder return (TSR), calls for returns of more than 35%, plus a $3 billion share buyback between 2025 and 2027. Officials added the company is targeting an operating profit margin of 9% to 10% in 2027 and over 10% in 2030 through continuous cost enhancements for EVs and the introduction of EREV models.
The company expects to achieve equal profitability on its entire powertrain lineup, including ICE, hybrids, EREVs and EVs by 2030.
Big returns on big investment
Hyundai officials plan to invest more than $90.2 billion into the company in research and development, capital expenditures and other strategic investments. That outlay begins this year and runs until 2033.
“From 2025 to 2027, Hyundai Motor will employ a proactive and sustainable TSR of more than 35%,” the company said.
“This will involve a flexible approach between the sum of dividends, buybacks and cancellations of treasury stocks. During this period, the company aims to achieve an average ROE of 11% to 12%.”
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