Hyundai aims to enhance in-house production to strengthen its position in the electric vehicle sector. Hyundai Motor Group is focusing on vertical integration to gain a competitive edge in the global electric vehicle market. Both China's BYD and America's Tesla, which compete for the top two spots in the electric vehicle market share, are securing most components, including batteries—crucial parts that influence electric vehicle pricing—from their own resources. According to the battery industry on the 23rd, Hyundai Motor Group's vertical integration ratio for electric vehicles is reportedly only half that of BYD and Tesla. The vertical integration ratio refers to the proportion of components, including batteries, that an automobile company develops and produces in-house when making electric vehicles. While official figures have not been tallied, industry estimates suggest that BYD is between 70-80%, Tesla 60-70%, and Hyundai 40-50%. Key items that are sourced in-house include battery packs (Hyundai Mobis), motors and inverters (current conversion devices), electric vehicle platforms (E-GMP), operating systems and software (Hyundai AutoEver) among others. As demand for electric vehicles slows, the importance of price competitiveness is increasing, leading to expectations that Hyundai will accelerate the internalization of batteries, which account for about 40% of electric vehicle prices. Recently, Kia decided to equip its domestic model of the compact electric sports utility vehicle (SUV) EV5 with lithium-ion batteries from China's CATL, interpreted as a choice considering cost-effectiveness. Hyundai is working towards establishing a large-scale battery R&D center in Anseong, Gyeonggi Province, aiming for completion in 2027. This facility is set to include capabilities for battery design, pilot production, and performance verification. BYD is dominating the global market by promoting budget models, with its strategy of vertically integrating components like batteries identified as a key factor. It has been praised for reducing costs thanks to internalizing battery production, having started as a battery manufacturer. BYD uses the 'blade battery' developed by its subsidiary, FinDreams Battery. It is also proactive in securing raw mineral resources for battery materials. BYD is investing in or pursuing acquisitions of mining companies in Latin America and Africa, sourcing key minerals such as lithium and nickel. Additionally, it has internalized battery management systems (BMS), vehicle semiconductors, drive motors, and software, and operates its logistics vessels (PCTC) for transporting automobiles. Tesla has achieved a level of vertical integration similar to that of BYD. In 2020, Tesla announced its commitment to internalizing battery production and succeeded in developing the 4680 cylindrical battery (46mm diameter, 80mm height) in 2022, also venturing into lithium refining. It has built its own smart operating system (OS) and possesses its software as well as electric vehicle charging facilities.

Hyundai boosts vertical integration to compete with BYD, Tesla in EV market - CHOSUNBIZ

Hyundai Motor Group is increasing vertical integration in electric vehicles (EVs) to compete with BYD and Tesla, aiming to enhance in-house production of critical components like batteries, motors, and software. Industry estimates suggest Hyundai's vertical integration ratio for EVs is 40-50%, compared to 70-80% for BYD and 60-70% for Tesla. Hyundai plans a 2027 battery R&D center in Anseong, Gyeonggi Province, while Kia sources batteries from CATL. BYD and Tesla are also advancing vertical integration through battery production, mineral sourcing, and in-house software development.