As Tesla Inc speeds up the shift to electric vehicles, Hyundai Motor’s long term suppliers have increasingly turned to “outsiders” for parts – but now the South Korean automaker’s own supply company, Mobis, is getting into the game.
Hyundai Mobis is in talks with two global automakers to provide electrified parts, its executive told Reuters, as it hopes to increase volume and lower prices.
The move is a direct response to automakers such as Volkswagen and Tesla muscling in with providers with whom Hyundai had worked for decades.
“We were not able to supply to other companies because we were busy with keeping up with Hyundai’s growth. Now this has changed,” stated Ahn Byung-ki, senior vice president of electric powertrain business at Hyundai Mobis.
“If we increase outside sales, overall prices will drop. This will benefit everyone – us, global companies and Hyundai,” stated Ahn, who previously developed eco-friendly vehicles at Hyundai Motor.
Hyundai Mobis, in which Hyundai Motor Group chairman Chung Mong-koo is the biggest individual shareholder, gets over 90% of its revenue from the mothership.
Ahn said decreasing electric vehicle (EV) costs is important for competing with cheaper gasoline cars without subsidies, especially as Chinese competitors undercut Hyundai, and Tesla accelerates the industry’s shift to EVs.
He said Mobis hoped to win orders from a couple of international automakers as early as this year, marking its first deal to provide electrified powertrains, although it has provided other parts of EVs or gasoline cars to Fiat-Chrysler and others.
Hyundai suppliers can leverage Hyundai’s experience with developing eco-friendly vehicles, he said, which puts them ahead of European competitors who have focused on diesel.
Hyundai Motor and its affiliate Kia Motors ranked third in worldwide battery electric vehicle sales in 2019, behind Tesla and Renault-Nissan.
Hyundai Motor Group’s heir and de facto leader, Euisun Chung, recently said Hyundai is intending to have over 10% of EV global market share in 2025.
Logistics affiliate Hyundai Glovis, which counts Euisun Chung as its biggest shareholder, has also expanded consumers from Hyundai to Tesla and Volkswagen to transport vehicles throughout continents.