Shocking! Hyundai is not making its own batteries! Can it stay competive agains Tesla and VW?
7 million units of electric vehicles Annually by 2026 and the key to achieving this target was to develop technologies such as solid state batteries and hybrid lithium metal batteries to attain the elusive 500 miles or 800 kilometer range for its next generation evs, as well as expand its sales base. By introducing low priced entry level products powered by more affordable lfp batteries, so with the amount of emphasis put into batteries, it would be a natural assumption that hyundai would be joining other major ev manufacturers around the world and producing its own batteries in preparation to become A full eevee company, as set out by its corporate vision, called strategy 2025.. In his issue of auto vision, we will explore what hyundai has planned for its future in its efforts to become the worlds top ev manufacturer. So before we go on wed highly appreciate your support by subscribing and turning on the notification bell, if you havent already and please dont, forget to like comment and vote on the question thats presented at the end of the video to cut to the chase. Unlike other manufacturers such as tesla and vw, the hyundai motor groups, chairman chung yui sun, has stated that it will not be producing its own batteries in his meeting with media in late 2021. Contrary to everyones expectation simply put its analogous to why an automobile manufacturer would not drill and produce its own fossil fuel, although we might be feeling the pinch of the battery supply issues right now, with long waits for the delivery and high prices of the evs.
Its expected that the manufacturing capacity of ev batteries is building up so quickly and so massively by everyone. The supply will no longer be an issue within a few years, and, along with the increase in the supply, the price will surely fall. Hyundai estimates that, in order to meet its target of 1.7 million units of ev production annually by the year 2026, it would need to secure 112 gigawatt hours of batteries in order for hyundai to produce all of the batteries itself. Its estimated that hyundai would need 10.2 trillion korean one or nine billion us dollars. Investment hyundai just doesnt see such investment necessary as the price of the batteries is expected to fall drastically lithium ion batterys. Current average price was 132 dollars per kilowatt hour in 2021. Dropping from 140 dollars per kilowatt hour in 2020, however, the price is expected to eventually fall below 100, as predicted by industry experts, including volkswagen thats, actually building its own manufacturing facilities to eventually fulfill 240 gigawatt hours out of 300 gigawatt hours required independently and when the Price does fall below 100. It will be possible to produce evs at the same price as equivalent ice cars, which will make evs truly accessible. Aside from the simple financial aspect in the investment needed to produce its own batteries, there is another big reason, and that is a barrier to entry manufacturing. Batteries for eva is a huge operation which not only involves manufacturing but incredulous work involved in the area, such as procuring source materials and risk management for safety, as well as to the environmental responsibilities that follow even to maintain material supply chain.
To procure a steady flow of nickel, lithium and cobalt needed in the manufacturing of the latest batteries, which the existing battery manufacturers already have tapped into by their equity positions with the suppliers and the producers in china and australia. Its not easy for automobile manufacturer to easily jump into to secure a supply chain. Although companies like tesla are going to the length to secure their own lithium mine in nevada, north carolina and even australia to run its gigafactory to produce its own battery in its mission to drop the price by 56, its certainly a daunting barrier to entry instead, hyundai Will focus on doing what it does best in building quality cars that are desirable, such as the award winning ioniq 5 and kia ev6 renowned for its ultra fast charging capability, thanks to its advanced 800 volt architecture, thats miles ahead of most of the competition as well As investing in the next generation technology to increase the energy density of the batteries and increase its efficiency through quantum computer simulation, as we have explained in our previous issues, so hyundais strategy to secure its supply chain for batteries is to leave the production to the people That know how to do the job and do it well through creating joint ventures with its existing partners, such as lg and sk, for high end batteries, as well as battery giant such as catl for economical batteries for the entry level, evs and products destined for the Developing countries, another reason for hyundai not jumping into battery manufacturing, is due to perhaps more important manufacturing needs, and that is to procure its own semiconductors, as you may be currently experiencing.
The supply problem related to all automobiles, and not only electric cars, are mostly due to the shortage and supply of the chips with cars now becoming more sophisticated and wired. More chips are required than ever before, with 200 to 300 semiconductors required to produce even a conventional ice vehicle. However, this number can be high as 2000 chips for an eevee thats equipped with the autonomous driving feature where the future is obviously headed. Yes, the supply problem of the ever popular ionic, 5 and ev6, as well as the delay in the introduction of new ev models, is really mostly due to the chip shortage problem. So securing the supply of the semiconductors seems like a top priority for a company like hyundai that has a mission to become an easy company faster than any other legacy manufacturer, and it has been made clear that hyundai will produce its own semiconductors. Relying on the development and manufacturing expertise that it possesses, through its parts, subsidiary, hyundai, movis, recently merged with hyundai mobas, to create synergy and efficiency, is hyundai. Ultron. A semiconductor arm of a hyundai motor group, which has been created back in 2012 from hand picking creme de la creme of the research and development personnel from hynex the company that started out as hyundai electronics industries back in 1983 before it was sold off to sk Corporation to become sk hynix, but there is a twist hyundai will invest in manufacturing its own chips for its evs, but surprisingly, they will not be the chips that are causing the current supply problem.
Mcu or microcontroller chips are widely used in the automotive industry, but the chips are not specifically for automotive purposes and can be created by any semiconductor manufacturer. The supply issue that we are currently experiencing is due mainly to the temporary manufacturing issue due to long periods of the pandemic. In addition to the surge in demand for electronic goods, the automotive sector is particularly taking the brunt of the supply shock because it sectors tend to pay higher prices for the chips, and the priority is just not there for the automotive industry. But as you can imagine, the supply problem is expected to be fully resolved by the year 2023. Eventually, so, instead hyundai aims to create chips that are specific to evs, in particular, for evs, with autonomous self driving features, which will be an integral part of every electric car in the future. In partnership with the compatriot electronic giant, samsung hyundai is building towards manufacturing its own soc or system on chip specific to autonomous driving technology, as well as the power semiconductor devices, which is a semiconductor device used as a switch or rectifier in power, electronics integral for evs. The cooperation between samsung will not only create synergy in its development of the design and technology, but it gives hyundai access to samsungs semiconductor foundry, which is one of the largest in the world, to vastly scale up its production capacity to the level previously unimaginable. With all these efforts in place, hyundai seems unstoppable in its effort to become the new leader in the industry, with the aim to transform into a smart mobility solution provider transitioning from a legacy automaker for the end of the video question.
What are your thoughts on hyundais decision not to manufacture its own battery but semiconductors instead? Do you think its a good strategy, when other major manufacturers are investing heavily to manufacture their own batteries? Please vote and share your views by clicking on the link in the comment section below thanks for watching auto vision, your best source for the fastest korean car news and rumors dont forget to comment like subscribe and click on the notification bell as not to miss any Of our new videos, it would help the channel greatly if you could view our videos as soon as they are uploaded and watch them all the way until the end, which would help to reach more people also to support our channel even further. Please join our membership and enjoy the exclusive content and preview of the upcoming episodes. Finally, dont forget to join our forum and share your passion for korean cars. At koreanparnews.