Hyundai Motor Group Unveils $35 Billion Investment Plan for Self-Driving, Electric Cars
Hyundai also plans to develop flying cars by 2025 and has received the South Korean government's support to develop hydrogen fuel cell cars as well.
Image for Representation (Image: Reuters)
Hyundai Motor Group said it plans to invest 41 trillion won ($35 billion) in mobility and other auto technologies by 2025, part of which will be directed to an ambitious effort to become more competitive in self-driving cars that have also received government backing. The plan, which Hyundai said encompasses autonomous, connected and electric cars as well as technology for ride-sharing, comes after the automaker and two of its affiliates announced an investment of $1.6 billion in a venture with US self-driving tech firm Aptiv. South Korea's government is also onboard, unveiling more funding for autonomous vehicle technology with President Moon Jae-in declaring on October 15 that he expected self-driving cars to account for half of the new cars on the country's roads by 2030.
"The self-driving market is a golden market to revitalise the economy and create new jobs," Moon said in a speech at Hyundai Motor's research centre near Seoul. The government intends to spend 1.7 trillion won between 2021 and 2027 on self-driving technology. It expects Hyundai to launch level 4, or fully autonomous, cars for fleet customers in 2024 and for the general public by 2027, an industry ministry official told Reuters. But some experts question whether targets set by the government and the automotive group, which also includes Kia Motors Corp, are realistic given the technological and cost challenges and the lack of home-grown technology.
In a 45-page report on future automotive technology, the government acknowledged South Korea lags in some key areas necessary for self-driving cars such as artificial intelligence, sensors and logic chips. "Hyundai has to buy technology from someone else because it lacks software technology. Even though it has a lot of cash, this could become a financial burden if its earnings deteriorate," Esther Yim, an analyst at Samsung Securities, said. Other analysts noted that the prospects for self-driving cars are quite murky.
General Motors Co’s self-driving unit, Cruise, said in July it was delaying the commercial deployment of cars past its target of 2019 as tech firms and automakers acknowledge it will take more time and money than they had expected to make autonomous vehicles safe for unrestricted use on public roads. South Korea's government said it would prepare a regulatory and legal framework for autonomous cars and the safety questions they pose by 2024.
It is also aiming to lay the technological and legal groundwork for demonstrations of flying cars by 2025. Hyundai Motor's executive vice-chairman Euisun Chung said last month that the company is looking at developing flying cars. Hyundai has also received much government backing for hydrogen fuel cell cars, with Moon calling hydrogen power the "future bread and butter" of Asia's number four economy and declaring himself an ambassador for the technology.
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