South Korean automaker Hyundai Motor Co has announced that it has invested KRW 2 trillion ($1.5 billion) to build an electric vehicle (EV) factory in Ulsan, South Korea. The factory’s construction will begin in the fourth quarter of 2022 and is expected to start production in the second half of 2025, with an annual capacity of 150,000 electric vehicles.
This marks a significant expansion in Hyundai’s electric vehicle production, as the company aims to boost its EV sales to 560,000 units by 2025, up from 82,000 in 2020. As part of this effort, Hyundai Motor, Kia Corp, and Hyundai Mobis Co Ltd will work together to establish a new EV factory.
Hyundai’s last domestic factory was built in Asan in 1996. This facility will be Hyundai’s first domestic automotive manufacturing plant in nearly three decades. It is expected to play a crucial role in helping the company meet its ambitious EV sales target. The investment is significant and highlights the group’s commitment to becoming a leading player in the global electric vehicle market.
Hyundai executives confirmed the investment during a tour of the Ulsan plant, where they exchanged official statements with South Korea’s Finance Minister Choo Kyung-ho. Choo pledged full support for the future mobility sector, including core technologies such as battery performance and self-driving safety. He also proposed increasing tax incentives for EV manufacturing investment and called on the auto industry to actively invest in the sector.
The upcoming EV factory is set to feature cutting-edge technology and serve as a blueprint for future domestic car production, as per reports in the local media. This facility will be exclusively dedicated to EV production.
Established in 1967, Hyundai Motor Company is a global automaker with its headquarters located in Seoul, South Korea. The factory is expected to be a best-practice example for the future of domestic car production and a significant contributor to South Korea’s EV industry.
Korean auto exports reached a new high of $6.52 billion in March, an increase of 64.1% year-on-year, according to the Ministry of Trade, Industry and Energy. Despite this, Korea suffered a trade deficit for 13 months in a row, with exports declining for the sixth consecutive month, mainly due to weak global demand for semiconductors. The latest announcement by the company is expected to boost the country’s EV industry and increase its export revenue in the future.
Kia is also stepping up its efforts to manufacture EVs, with plans to build a new plant for the production of electric “Purpose Built Vehicles” (PBV) and convert some of its existing internal combustion engine vehicle plants to EV plants. The PBV factory, with an annual capacity of 150,000 electric cars, will be built on the site of Kia’s existing Hwaseong plant in Gyeonggi province and will start production in the second half of 2025. Kia’s efforts are in line with the South Korean government’s push to encourage companies to invest in electric car plants and other “national strategic technologies,” including chips, batteries, and vaccines.
The Finance Minister has stated that starting in June, companies that invest in EV production facilities will be eligible for tax credits. This announcement was made during the Finance Minister’s visit to Hyundai’s Ulsan plant