Hyundai Motor Group is advancing its electric vehicle (EV) strategy by developing in-house, cost-effective lithium iron phosphate (LFP) batteries to diminish reliance on Chinese suppliers.
Hyundai is collaborating with Korean battery manufacturers to create LFP batteries for its EVs by 2024.
The initiative aims to equip Hyundai and Kia’s small to mid-range EVs with these batteries starting in 2025, moving away from Chinese-made batteries.
Hyundai’s plan includes a $7.25 billion investment over the next decade for battery tech, with an emphasis on research and potential in-house production.
The Korea Herald reports that Hyundai Motor Group is steering its efforts towards establishing its own battery development program. This initiative is aimed at creating price-competitive LFP batteries for its electric vehicle fleet, with an expected completion date in 2024. The move is a clear strategic pivot to decrease the auto giant’s reliance on Chinese battery technology amid global trade tensions.
The company’s plans include integrating these batteries into both Hyundai and Kia’s range of small and mid-priced electric vehicles from the year 2025. Despite not commenting directly on these developments, a Hyundai official acknowledged the company’s interest in working with various Korean battery producers, both large and small, to enhance the technical capabilities of these batteries, including their energy density and capacity.
Hyundai’s decision to shift towards in-house battery production is partly a response to geopolitical pressures, as the US and its allies face a tech trade conflict with China. By doing so, Hyundai is not only seeking technological independence but also positioning itself to better cater to the growing market for more affordable electric vehicles, a demand driven by the current economic climate marked by inflation and a slowdown in EV sales.
The company’s commitment to this new direction was emphasized by CEO Chang Jae-hoon’s announcement of a substantial 9.5 trillion won ($7.25 billion USD) investment into battery technology over the coming decade. This funding is intended to support the development of various battery types, including LFP, NCM, and all-solid-state batteries, in collaboration with industry and academic partners.
In a proactive move, Hyundai has already incorporated an NCM battery developed with SK On into its new Santa Fe hybrid model, advancing the timeline for commercial production. Furthermore, Hyundai is exploring partnerships with US-based firms for the research and development of next-generation battery technologies and is considering establishing a pilot production line in Gyeonggi Province to further this endeavor.