According to Reuters, on January 23, South Korean automaker Hyundai Motor stated that it is in talks with U.S. automaker General Motors to supply electric commercial vehicles. Hyundai also mentioned that it plans to sign a binding agreement in the first quarter of this year to collaborate in areas such as auto parts procurement, passenger vehicles, and commercial vehicles. It is reported that Hyundai and General Motors signed a preliminary cooperation agreement last year.
Hyundai's Chief Financial Officer, Lee Seung Jo, said during an analyst conference call, "We are considering rebranding commercial electric vehicles and supplying these types of models to General Motors. This deal will pave the way for us to enter the North American commercial vehicle market."
As negotiations continue, automakers are preparing to address the uncertainties of U.S. policies in the world's second-largest automobile market. This week, former President Trump announced plans to impose a 25% tariff on Canada and Mexico starting February 1.
Hyundai expects that, compared to its Japanese competitors like Toyota and Honda, which have larger production bases in Mexico and Canada, the impact of U.S. tariffs on Hyundai will be minimal. At the same time, Hyundai stated that the company plans to further localize production in the U.S. to minimize any tariff impact. The company also revealed that it will produce hybrid vehicles at its new plant in Georgia, U.S.
As Trump also mentioned the possibility of removing the electric vehicle tax credit policy, Hyundai pointed out that automakers may face uncertainties such as a slowdown in major markets, reduced demand for electric vehicles, and macroeconomic fluctuations.
Lee Seung Jo stated, "We expect more business uncertainty this year than ever before, as policy changes may occur not only in the domestic Korean market but also in the U.S. market, while the EU will introduce stricter carbon emission regulations."
Hyundai also mentioned that after the South Korean president declared a state of emergency in early December, the Korean won began to depreciate significantly, which will attract capital back to South Korea but also raise vehicle warranty costs, thereby reducing profit margins.
At the same time, Hyundai expects that due to weak demand for vehicles, the company's sales growth will be halved by 2025. By sales volume, Hyundai-Kia Automotive Group is the third-largest automaker globally. Hyundai predicts that its 2025 revenue will grow "3.0% to 4.0%" compared to the previous year, while the expected growth rate for 2024 is 7.7%. The company anticipates that its operating profit margin will drop from 8.1% in 2024 to "7.0% to 8.0%."
Hyundai announced that its operating profit for the fourth quarter of 2024 (October to December) was 2.8 trillion KRW (approximately $1.95 billion), as the company launched promotional campaigns in the face of a slowdown in the automobile market. However, this is still below the average forecast of 3.2 trillion KRW by 24 analysts compiled by LSEG SmartEstimate.
Hyundai's global retail sales in the fourth quarter of 2024 declined, with strong sales in the U.S. and India, but the weak demand in South Korea, Europe, and China offset these gains. After the earnings report was released, Hyundai's stock price remained flat.
Additionally, Hyundai is considering supplying its Ioniq 5 electric vehicles to autonomous taxi developer Waymo. Hyundai is developing autonomous driving technology under its Motional division and stated that the company aims to commercialize autonomous taxis next year.
Furthermore, Hyundai has expressed openness to the idea of listing its humanoid robot subsidiary, Boston Dynamics, but stated that this will not be considered in the short term.
