Despite the stockmarket volatility and growing investor fears of a slowdown in economic activity – and even recession – the electric vehicles / green metals boom shows no sign of slowing.
South Korean giant Hyundai is boosting the already ambitious plans it and its affiliate Kia have in this area – Hyundai has designs on the US for expansion between now and 2030, as does another South Korean company in Samsung.
Hyundai says it and Kia plan to invest 21 trillion won ($US16.5 billion) to lift its capacity of electric vehicle production in South Korea and associated technologies (such as batteries) by 2030.
The two companies will be expanding their current EV production lines, establishing EV infrastructure (such as charging stations), and developing future mobility parts and technologies.
The two firms plan to raise the number of their EVs manufactured in South Korea to 1.4 million units in 2030 from an estimated 350,000 in 2022.
The 1.44 million units of EV production volume in South Korea would account for about 45% of the two companies’ combined global EV production capacity of 3.23 million EV units in 2030, Hyndai said in a statement.
Kia also plans to expand its Hwaseong plant, near Seoul, with a 150,000-unit annual production plant to manufacture purpose-built vehicles.
Hyundai Motor Group revealed this week that it will invest an additional $US5 billion in the United States by 2025 to strengthen collaboration with U.S. firms in advanced technology.
The investments will be in robotics, urban air mobility, autonomous driving and artificial intelligence
This will be in addition to the $US5.5 billion in Georgia to build electric vehicle (EV) and battery facilities.
The new investment brings its planned US total through 2025 to about $US10 billion, above the $US7.4 billion it announced last year.
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Meanwhile Stellantis and South Korea’s Samsung will build a $US2.5 billion battery plant in Indiana, as the parent group of Chrysler and Fiat plays catch up with its US rivals, Ford and GM.
Stellantis said the factory is set to open in 2025 and would be Samsung’s first battery manufacturing site in the US. The investment follows recent deals by South Korean rivals, including LG Energy Solution and SK On, which are opening US joint ventures with global automakers.
Stellantis has plans to sell five million EVs annually by 2030. The company hopes fully electric vehicles will represent half of its North American car and light truck sales and to sell only electric passenger cars in Europe by that date.
The new plant was announced after Stellantis and LG Energy Solution announced a $US4.1bn joint venture in March to build an EV battery plant in Canada.
General Motors plans to invest $US7 billion in its home state of Michigan to convert an existing car factory to EV production and establish a battery plant.
Ford is concentrating its EV expansion in the southern US (where there are right to work states which have lower wages and no unions).
It has plans to spend $US11 billion on assembly and battery plants in Tennessee and Kentucky. The company wants to produce 600,000 electric vehicles per year by the end of 2023 and in March separated its EV division from its traditional auto businesses.
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In Europe there was another aggressive forecast from the head of VW that his company would overtake Tesla by 2025 to become the world’s leading EV maker.
Speaking to CNBC at the World Economic Forum in Davos, Switzerland, on Tuesday, Herbert Diess said:
“Tesla currently is in the lead when it comes to EVs, probably also it is the most digital car company already and they have some advantages,”.
“We are still aiming at keeping up and probably overtaking by 2025 when it comes to sales.”
Diess said Tesla has been able to demonstrate good results and high returns with a credible business model. However, he reaffirmed his belief that Volkswagen could soon close the gap when it comes to EV sales.
“I think for Tesla, also, ramping up now will probably be a bit more challenging. They are opening up new plants and we are trying to keep up speed. We think in the second half of the year, we are going to create some momentum,” Diess said.
Continuing shortages of critical supplies, particularly batteries metals such as lithium are expected to be an ongoing constraint for the growth of electric vehicle sales in the years ahead – as Tesla’s Elon Musk has been saying now for months.
Nonetheless, Diess said there are some positive signs on the horizon. He expects to see some relief from the semiconductor supply market from the middle of the year.
“I would say that we would see an alleviation of this situation towards mid-year and second half we should be in better shape — if the situation is not getting any worse, which I don’t think so,” Diess told CNBC
When asked whether this means he expects the semiconductor crisis could end in the second half of the year, Diess replied: “I wouldn’t say end but we see a much-improved situation. I think supply chains are getting in order again.”
He should keep a close eye on BYD of China – it is now almost wholly an electric car company (Hybrid and battery EVs) with production running at around 100,000 units a month (in depressed April).
