Hyundai in Talks with GM for Commercial EV Supply, Facing Market Uncertainties
Hyundai Motor is engaged in discussions with General Motors (GM) to provide commercial electric vehicles (EVs) to its US counterpart amid slowing demand and market volatility.
EV Cooperation
As part of a preliminary agreement signed last year, Hyundai aims to finalize binding contracts for parts sourcing, passenger, and commercial vehicle collaboration within Q1 2023. The automaker plans to re-brand its commercial EVs for supply to GM, facilitating its entry into the North American commercial vehicle market.
Policy Uncertainties Amidst Shifting Political Landscape
The automotive industry is facing uncertainties due to policy changes in the US, including potential import tariffs. Hyundai, however, expects less impact compared to Japanese rivals with expanded manufacturing operations in Mexico and Canada. The company intends to localize production in the US and introduce hybrid vehicle production at its new Georgia plant to minimize tariff risks.
Slowing Growth and Market Challenges
Hyundai anticipates a moderated revenue growth of 3.0-4.0% in 2025, down from 7.7% in 2024. Uncertainties such as market slowdown, reduced EV demand, and macroeconomic volatility are cited as contributing factors. The potential elimination of EV tax credits under the Trump administration further adds to industry concerns.
Financial Performance
For October-December 2022, Hyundai reported an operating profit of 2.8 trillion won ($1.95 billion) despite increased promotional spending amid a decelerating car market. This fell below analyst expectations of 3.2 trillion won.
Other Ventures
Hyundai is considering supplying Ioniq 5 EVs to robotaxi developer Waymo in North America and beyond. The automaker remains committed to commercializing robotaxis through its Motional unit in the coming year. While open to the possibility of listing its Boston Dynamics humanoid robot unit, the company has no immediate plans for such a move.