November 26, 2024

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[THE INVESTOR] Hyundai Motor’s Chinese joint venture with Beijing Automotive Holdings, Beijing Hyundai Motor, is considering launching an electric version of its top-selling Elantra compact in China to meet the country’s toughened emissions rules, Automotive News China reported on Jan. 24.

While Hyundai Motor ranks third in terms of sales among auto brands in China, the company has not yet released a full-electric vehicle in the country, the largest and fastest-growing EV market. 

2017 Hyundai Elantra.

According to industry sources, Hyundai plans to start producing the Ioniq EV at its Chinese plant this year.

“We have not yet decided on the Chinese production of the Ioniq,” a Hyundai spokesperson said, declining to confirm the report on Elantra EV.

Hyundai and its smaller affiliate Kia Motors are set to release two eco-friendly vehicles in China -- Hyundai Sonata plug-in hybrid in April and Kia K5 plug-in hybrid in October.

The carmaker aims to launch nine new eco-friendly models by 2020 in China alone.

As part of the renewed green car push, Hyundai opened its fourth Chinese plant in Cangzhou in October last year, with the fifth one opening in August this year in the southwest city of Chongqing.

With the completion of the new Chongqing plant, Hyundai’s production capacity in China is expected to reach 1.65 million vehicles per year, up from the current 1.35 million units.

However, the carmaker is facing some challenges due to China’s tougher stance on Korea-made EV batteries.

Its key battery supplier LG Chem, together with Samsung SDI, have failed to receive government subsidies for EV purchase. Without the cash incentives that amount to 25,000 yuan (US$3,647), Hyundai and Kia cars will lose the price war against their cheaper Chinese rivals that are powered by their compatriot battery makers.

“Ioniq’s Chinese production is also likely to be delayed due to the battery issue,” said an industry source. “There is speculation that Hyundai might have to source from a Chinese battery maker but it will take years to redesign the car for a new battery supplier.”

By Ahn Sung-mi (sahn@heraldcorp.com)