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Hyundai Motor Explores Collaboration with General Motors for Electric Vehicles
SEOUL (Reuters) – Hyundai Motor announced on Thursday that it is in discussions with General Motors regarding the supply of commercial electric vehicles (EVs). The South Korean automaker faces a forecasted decline in sales growth this year amid waning demand in the market.
The company expressed concerns about potential policy risks in the United States, particularly under the presidency of Donald Trump, who has indicated plans for import tariffs. Hyundai noted that any adverse effects from such measures would more heavily impact Japanese competitors like Toyota and Honda.
Having established a preliminary partnership with GM last year, Hyundai is optimistic about finalizing agreements on parts procurement and collaborations on passenger and commercial vehicles by the end of the first quarter of this year.
Hyundai’s Chief Financial Officer, Lee Seung Jo, revealed during an analyst call, “We are evaluating the option of rebranding our commercial EVs to supply GM. This partnership could facilitate our entry into the North American commercial vehicle sector.”
These negotiations occur against a backdrop of increasing uncertainty for automakers in the U.S., now the second-largest automobile market globally. Recently, President Trump mentioned the likelihood of imposing a 25% tariff on imports from Canada and Mexico, further complicating the landscape for manufacturers.
Additionally, Hyundai experiences growing unease due to political instability close to home in Seoul. Lee commented on the challenges ahead, stating, “We anticipate unprecedented business uncertainties due to possible policy shifts, not only in South Korea but also in the U.S., combined with stricter emission standards in Europe.”
Despite the challenges, Hyundai believes it will be less affected by U.S. tariffs compared to its Japanese competitors that have substantial manufacturing operations in North America. The automaker plans to enhance local production in the U.S. to mitigate any tariff-related consequences and has announced intentions to produce hybrid vehicles at its new facility in Georgia.
Projected Revenue Growth Slows
Hyundai, together with its affiliate Kia, ranks as the third-largest automaker globally by sales. The company has revised its revenue growth expectations for 2025 down to 3.0% to 4.0%, a notable decrease from the previous year’s forecast of 7.7%. The operating margin is anticipated to fall to between 7.0% and 8.0%, slightly below the 8.1% projection for 2024.
The automaker has identified several uncertainties impacting its future performance, including a slowdown in critical markets, decreasing demand for EVs, and broader economic volatility. This comes as President Trump suggests the reconsideration of EV purchase tax credits, which has added another layer of complexity for the industry.
Hyundai indicated that the depreciation of the Korean won, triggered by the political chaos following the impeachment of the former president, could improve repatriated earnings. However, it will also increase liabilities related to vehicle warranties, thereby affecting profit margins.
For the fourth quarter, Hyundai reported an operating profit of 2.8 trillion won ($1.95 billion), although this fell short of the 3.2 trillion won average forecast from 24 analysts, as compiled by LSEG SmartEstimate.
During this period, global retail sales experienced a decline, with robust sales in the U.S. and India counterbalanced by weak demand within South Korea, Europe, and China. Following the earnings report, Hyundai’s stock remained steady.
In addition to its collaboration with GM, Hyundai is also exploring supplying its Ioniq 5 EVs to Waymo, a developer of autonomous taxi services, both in North America and globally. The automaker is making strides in autonomous technology through its Motional unit, with plans to roll out robotaxis next year.
Moreover, Hyundai has indicated a willingness to consider a public listing for its humanoid robot division, Boston Dynamics, although this is not an immediate priority.
($1 = 1,436.4200 won)
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