South Korea’s Hyundai Motor vowed to increase sales of electric vehicles (EV) to more than half a million by 2025 as part of a bid to focus on new technologies and catch up with competitors, but some analysts observed the target as conservative and warned of the expenses.
The announcement by Hyundai, the world’s fifth largest automaker along with affiliate Kia Motors, underscores the accelerating strategy shift under Euisun Chung who became the motor group’s executive vice chairman in 2018.
Hyundai declared a $35 billion investment earlier week in mobility and other auto technologies by 2025, less than a month following the unveiling of a $1.6 billion deal to develop self-driving vehicle technologies with Aptiv.
The firm stated on Thursday it prepares to introduce 16 EV models by 2025 to increase sales of such vehicles 17-fold to 560,000 by that year.
Still, that would be equal to more than 10% of its projected worldwide sales this year.
The projection compares with more bullish forecasts provided by its bigger competitors. Volkswagen AG expects to make 22 million EVs over the next decade, where as General Motors intends to sell 1 million EVs yearly by 2026.
“That is not an ambitious target. If Hyundai fails to increase volumes fast enough, costs of electric cars will weigh on profitability,” stated Lee Jae-il, an expert at Eugene Securities & Investment.
Hyundai stated, that the EV market would deal with intensifying competition and oversupply soon and automakers failing to meet harder European emissions regulations will face heavy penalties and suffer a major blow to their reputation.
“EV supply is expected to surpass demand from the second half of next year,” stated Ka Suk-hyun, vice president of Hyundai Motor, during an earnings conference call.