Hyundai is set to launch a new EV brand as it looks to gain its share of the largest market globally. The automaker is betting on custom EVs to revamp sales in the region.
China is the undisputed EV market leader. Fully electric vehicles accounted for over 23% of new car sales last year in China, with 6.68 million units sold. That’s up from 12% just two years ago and around a third of the global market.
South Korea’s Hyundai wants its piece of the booming market. According to a new report from The Korean Economic Daily, Hyundai is partnering with China’s BAIC to launch a new EV brand.
Hyundai and BAIC’s relationship dates back to 2002 when they established a joint venture to build a car plant in China.
Although reports claimed Hyundai would produce EVs under the Chinese automaker’s Arcfox brand in October, those plans have since fallen through over financing.
Now, Hyundai will launch a tailor-made EV brand with BAIC. The project, codenamed OE RE, is part of the South Korean automaker’s strategy to introduce five new EVs in China over the next three years.
Can Hyundai revamp sales with a new EV brand in China?
The move comes as Hyundai looks to turn around slumping sales in China. Hyundai’s market share has fallen from a peak of 7% in 2017, with 1.6 million cars sold, to about 250,000, or less than 1%.
Beijing Hyundai posted an operating loss of $598 million (800 billion won) in 2022 with rising competition. Late last year, Hyundai sold its plant in Chongqing for $225 million, less than half of what it purchased it for.
Although the move signaled Hyundai’s exit from China, the South Korean automaker believes EVs can help turn things around.
The report notes Hyundai’s executive chairman, Chung Euisun, asked employees to learn from the success of Chinese EV makers after test-driving a ZEEKR electric car.
Hyundai is throwing its all into the new EV project to take on market leaders like Tesla and BYD. According to sources, it’s expected to be equipped with LFP batteries to drive down prices.
BYD is dominating the LFP battery market with an over 40% share through November. Its closest rival, CATL, secured 33.9% of the market.
Although Hyundai planned to launch its popular IONIQ EVs in the region, it believes a unique brand designed for China will be more competitive.
“Hyundai is set to take the bull by the horns,” an auto industry official said. An official at Beijing Hyundai explained the company has “a big picture to develop China-tailored EVs” but no concrete plans yet.