Revving Up the Future: Hyundai and GM Shift into High Gear with Groundbreaking Joint Venture
Hyundai and General Motors Form Strategic Alliance to Develop New Vehicles
South Korea’s auto giant, Hyundai Motor Co., and U.S. auto giant General Motors Co. are exploring ways to jointly develop new vehicles and source raw materials for clean energy cars.
Hyundai Motor Group Executive Chairman Chung Euisun and General Motors Chairman and Chief Executive Mary Barra have signed a non-binding memorandum of understanding (MOU) to form a strategic alliance.
This marks Hyundai Motor’s first strategic alliance with a global finished car manufacturer, which could destabilize the global auto market, according to auto industry observers.
Under their agreement, Hyundai Motor and GM will cooperate in the development of passenger and commercial cars, share supply chains for the production of green cars, and jointly develop electric and hydrogen fuel cell car technologies.
“We will evaluate opportunities to improve competitiveness in key markets and vehicle segments, as well as drive cost efficiency and deliver stronger value to customers through our combined expertise and innovative technologies,” said Chung.
“Our goal is to unlock the scale and creativity of both companies to deliver even more competitive vehicles to customers faster and more efficiently,” said Barra.
Collaboration to Lower Production Costs and Improve Efficiency
Through the collaboration, they are expected to lower production costs in key strategic areas while improving overall efficiency, enabling them to better compete against growing Chinese EV makers.
They are expected to jointly develop not only internal combustion engine cars but also clean energy technologies, electricity, and hydrogen.
They are also mulling re-badges for their cars, which they will co-develop later.
Car repacking is the widespread practice of reselling another company’s car model under a new badge, mainly to save costs.
GM has 35 plants worldwide, which means that Hyundai Motor can produce its cars even in countries where it does not have physical plants, such as Canada, by using GM plants through their strategic alliance.
Joint Procurement of Raw Materials
They will also jointly procure raw materials such as batteries for electric vehicles and general auto parts like steel to remain competitive in the EV market.
Hydrogen Fuel Cell Technology
Using Hyundai Motor’s world-leading hydrogen fuel cell technology, GM is expected to develop new fuel cell cars.
Hyundai Motor started developing hydrogen motor technology in 1998 and introduced the world’s first hydrogen car model in 2013.
It introduced the hydrogen-only NEXO model in 2018 and the XCIENT fuel cell truck in 2020.
According to the auto industry, GM is on a $65 million project sponsored by the US Department of Energy to develop a mid-size fuel cell pickup truck.
The two companies are also expected to build a production and sales infrastructure for clean hydrogen cars in the United States.
Benefits of the Alliance
The union of the world’s No. 3 and No. 5 automakers stands to gain as GM is strong in the commercial vehicle, SUV, and pickup truck sectors, while Hyundai Motor boasts powerful hybrid and EV lines.
As the two partners plan to enhance their alliance in broad sectors, including future mobility technologies, their union should allow them to have even greater influence going forward, market analysts said.