Hyundai’s Boyle: Going Beyond the Singular Transaction

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By Gary S. Vasilash

One thing that Olabisi Boyle, senior vice president, Product Planning & Mobility Strategy, Hyundai Motor North America, points out that is probably something that many people don’t know is this:

  • On a global basis Hyundai Motor Group (including Genesis and Kia) is the third-largest OEM. Not General Motors. Not Stellantis. Hyundai. Behind Toyota and Volkswagen Group.

In the U.S., the company’s sales have been growing with consistency:

  • In 2023 it had total sales of 801,000 vehicles, up 11% over 2022 sales (724,000)
Hyundai’s Boyle is working to expand ways that customers interact with the company’s products, well beyond the drive. (Image: Hyundai)

One of the areas that Boyle is keen on is the development of the market for what she terms the “early majority” for electric vehicles, moving beyond the “early adopters.”

Hyundai has long (comparatively speaking) been in the EV space and at present the brand offers the Kona Electric, IONIQ 5 and IONIQ 6.* (It also has the Nexo—which is a fuel-cell based EV.)

Massive & Flexible

Hyundai Motor Group is constructing what it calls “Metaplant America” near Savannah, Georgia, a complex on a 2,923-acre site that includes a vehicle assembly plant as well as a battery plant. Plans call for the $7.59-billion plant to go into production early in 2025. It will build the IONIQ 5, IONIQ 6, Genesis GV60 and Electrified GV70 vehicles, as well as the XCIENT class 8 fuel-cell truck.

Boyle says that the Metaplant, which will have an annual capacity of 300,000 vehicles, is sufficiently flexible such that if the demand dictates, it can also produce combustion engine-equipped vehicles.

Beyond Vehicles

But Boyle’s view of Hyundai’s efforts in the mobility space go well beyond particular vehicles to something that can be thought of as an entire infrastructure. If it’s a gas-powered vehicle, then the ability to pay through the touchscreen of the Hyundai. If it is an electric vehicle, then the ability to work through the Hyundai Home Marketplace to get what’s needed for home charging. If it is a question of obtaining an EV for a short period (e.g., month-to-month), there is Evolve+ that makes this real. If it is a matter of finding and paying for parking, there’s an app for that.

Hyundai Home helps EV customers get what they need to equip their residences for seamless electric vehicle operation. (Image: Hyundai)

In other words Boyle and her colleagues are looking at a consumer’s engagement with Hyundai as something more than a transaction that occurs at a dealership once every few years. Rather, it is something that they are building out so that the company can provide things that are helpful, not intrusive, things that facilitate everyday activities, not complicate them.

They certainly want to grow the number of vehicles that are purchased.

But they recognize that there is a market shift going on, one that they are helping propel.

==

*And it also has “electrified” vehicles including hybrid versions of the Elantra, Sonata and Tucson, with the Tucson also as a plug-in hybrid.

EV Ennui

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By Gary S. Vasilash

U.S. dealers are not particularly keen on electric vehicles (EVs).

So indicates the Cox Automotive Dealer Sentiment Index (CADSI) released this year.

When asked how EV sales were doing in Q1, the index score was 42. That’s off from 50 in Q1 in 2023.

And while 42 may not be particularly meaningful, know that it is the lowest score since the question was included in CADSI in Q2 2021.

The outlook among dealers regarding EV sales going forward isn’t good, either.

In Q1 2023 the index score was 53. Back then, a majority of dealers saw EV sales growing.

In Q1 2024 that index score is down to 36.

That’s the lowest score for EV outlook since that question was asked.

Seems things are no longer anticipated to be growing for EVs.

It seems as though this is not simply a U.S. phenomenon, either.

While Cox was looking at new vehicle sales, over in the U.K. and outfit that specializes in used vehicles—going from consumers to dealers rather than the more conventional vice-versa—found that sales are not particularly robust.

Compared with last year, HonkHonk found 38.5% of dealers are “much less interested” in EVs and 12.3% are “a bit less interested.”

Or 50.8% of dealers are not all that keen on putting EVs in stock.

Sebastien Duval, CEO of HonkHonk, said, “Right now, dealers can’t get enough small or medium petrol cars, medium diesels and even hybrids, since the market began recovering in 2024. But less than one in ten of them want to snap up a battery EV car more than they did than a year ago.”

That’s right: Diesels are more appealing than EVs in the U.K. used market.

Diesels.

VW Group Isn’t the Only OEM “Challenged”

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By Gary S. Vasilash

When you see the word challenge in any form in a financial announcement, know that this really means some variant of “we are really struggling but don’t want to make it seem as though we are anything other than in control.”

(Image: VW Group)

When Volkswagen Group announced its 2023 financial results there were:

Oliver Blume, CEO: “Volkswagen Group is entering the long-distance rate of transformation from a position of strength. At the same time, we are aware of our challenges and are tackling them consistently to leverage the enormous potential of Volkswagen Group.”

Arno Antlitz, CFO and COO: “In a challenging environment, Volkswagen Group delivered robust results in 2023.”

While the company has said that it expects 50% of sales to be electric vehicles by 2030, for the full year in 2023 Group EV sales were 8.3%. So essentially it has six years to add 41.7%.

In the release about its earnings there’s this:

“Volkswagen Group is convinced that the future of mobility is electric. While some countries continue to show an impressive pace of transformation, the ramp-up of electric mobility in other regions is unfolding less quickly than expected. Volkswagen Group’s strategy is therefore characterised by flexibility. While extensive investments are being made in the expansion of electric mobility, highly competitive, efficient, and attractive models with combustion engines will remain part of the product range during the transition phase. Improved and new plug-in hybrids complement the range in many markets.”

Which could be restated as:

“We’ve bet big on EVs and are seeing returns in some areas but not like we’d hoped overall. So we figure we’d better be sure to continue to offer things that have internal combustion engines under their hoods, with or without hybrid systems attached.”

Of course, placing bets is about the future.

If VW Group doesn’t ante up on what seems as though it will play out (i.e., at some point there will be a bona-fide acceptance of EVs by a mass market, not the level of acceptance that has been puffed up (take Tesla numbers out of the sales of EVs in the West and see how well they are doing)), then it will be in a bad situation at the point that it does.

But playing is not without a cost.

It, like other OEMs, are investing billions in electrification.

There are a couple of things that are going to make receiving a return somewhat problematic:

  1. Tepid consumer interest
  2. Cheap Chinese EVs

And it isn’t VW Group alone that needs to consider its play in relation to those two factors.

Which makes it all the more. . .challenging.

The Economic Considerations of Building Better Batteries

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By Gary S. Vasilash

When you consider the on-going development of different battery chemistries (to make batteries that are less expensive or more capable or with fewer rare earths or whatever) and you then take into account the billions of dollars that OEMs have already invested in battery manufacturing equipment, a question arises about the extent to which the existing equipment can be used to produce batteries with a different chemistry than the one for which the factories are setup for.

While an imperfect analogy: Consider a factory that makes compact cars. It is decided that more capacity is needed to produce full-size SUVs. While most of the equipment in the plant can be reused, there is still a non-trivial amount of new robots and suchlike that have to be purchased as well as all manner of new tooling.

If that holds in the case of battery manufacture, than it is, to quote Carl Sagan from another context, “billions and billions.”

Lyten, a firm that describes itself as “a supermaterials application company,” has announced that it has determined that the lithium-sulfur battery that it has developed will allow something of a seamless transition from what is being done in many battery plants today.

Dan Cook, Lyten CEO and co-founder:

“Lyten now has demonstrated that lithium-sulfur can be built in standard cylindrical and pouch formats, can be scaled to automated manufacturing, and can be done on the same equipment and processes already being used around the globe to manufacture legacy lithium-ion.

“The result is a significant reduction in the manufacturing scale up risk for a locally sourced, locally manufactured battery that can leapfrog the performance and cost of existing lithium ion and future solid-state batteries.”

One of the benefits cited by the company for its alternative chemistry is that it contains no nickel, cobalt, manganese, or graphite in the cathode and anode, which means that battery materials can be locally sourced and the battery locally manufactured. (Which can mean $3,750 per vehicle tax credits for the manufacturer for local materials and another $3,750 per vehicle for local battery component manufacturing.)

And there’s that other non-trivial bonus of keeping one’s instaslled base of equipment.

American Muscle Italian Style

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Although you may associate Italian vehicles out of Monza that have the ability to go from 0 to 100 km/h in 4.5 seconds with a sleek sports car, it is unlikely that you’d think of. . .a pickup truck.

What to drive over the Alps: the MILITEM MAGNUM 700 (Image: MILITEM)

Yet that’s precisely what the MILITEM MAGNUM 700 is.

In fact, the vehicle is based on a Ram 1500 Night Edition and it has a 6.2-liter 702-hp HEMI under its hood.

Evidently, the people at MILITEM have done some modifications, like adding forged wheels and modifying the suspension.

There is also something called the “MAGNUM BAR” (the company is clearly big on capital letters), which is described as “an exclusive roll bar. . .equipped with a retractable light bar with automatic LED lights” which “awards personality, style and function to the vehicle, making it even more distinctive in practicality and design.”

Somehow “practicality” is something not necessarily associated with this European variant of a Ram TRX.

Pricing? ~$180,000—plus VAT.

MINI in the U.K.

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Although MINI is owned by BMW, it is a nice gesture on behalf of the Bavarian-based company to keep production operations going in the U.K.

Start of gen five. (Image: MINI)

Today the production for the fifth-generation MINI Cooper began at Plant Oxford, the place where initial production of the vehicles commenced back in 1961; Charlie Cooper, grandson of John Cooper, where the surname for the car came from, drive the first three-door off the line.

In addition to performing final assembly at the plant in Oxford, two other U.K. plants contribute to MINI production: BMW Group Plant Swindon produces stampings and subassemblies; BMW Group Plant Hams Hall manufacturers three- and four-cylinder engines for the vehicles.

Rivian and Capacity Utilization

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By Gary S. Vasilash

Last year Rivian produced 57,232 vehicles in its assembly plant in Normal, Illinois.

Which made it somewhat curious when it announced last year that it was planning to break ground for a new factory this year for a plant in Georgia that would have the capacity to build 400,000 units.

The Rivian plant in Illinois began its production existence in 1988 when it was the Diamond-Star Motors factory.

Diamond-Star? It was a joint venture between Chrysler and Mitsubishi.

Chrysler had had a bit of a financial fix in 1991, so it sold its half of what was the Diamond-Star plant to Mitsubishi.

Being the sole owner, it changed the name of the plant to “Mitsubishi Motor Manufacturing of America” (MMMA). Things didn’t work out so well, so Mitsubishi stopped making cars there in 2015, when 38,186 vehicles were built.

Here’s the thing: As originally configured the plant had a production capacity of 240,000 vehicles.

The highest number of vehicles produced at MMMA was 222,414. Nearly full production.

Rivian bought the then-2.6-million square-foot plant in January 2017. And set about on an expansion.

But according to Rivian, the annual capacity at the factory is 150,000 vehicles. Presumably making R1Ts, R1Ss and EDVs is somewhat more complicated than iMEVs (which are arguably much smaller than any of those Rivians).

Rivian R2 is supposed to go into production in Illinois in 2026. (Image: Rivian)

When it announced the R2 and R3 models yesterday it was announced that rather than waiting for the factory to be built in Georgia for the production of the new models, it is putting the R2 into the Normal plant which will have, by R2 launch time in 2026, an expansion of capacity to 215,000 vehicles.

Here’s the thing. Whether the capacity is 150,000 units or 215,000, that’s an awfully big delta between either and ~60,000 vehicles.

It is a rule of thumb in automotive manufacturing facilities capacity utilization has to be at from 70% to 80% to be cost effective.

Seventy percent of 215,000 is 150,500.

Rivian has a long way to go to get there and not a whole lot of time.

Joby Getting Real in Ohio

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By Gary S. Vasilash

There is something to be said for tradition, so Joby Aviation, which is developing electric take-off and landing (eVTOL) for commercial passenger service—including what has heretofore been the more terrestrial ride sharing—has acquired a building a building on the grounds of the Dayton (Ohio) International Airport for a manufacturing operation.

Joby Aviation aircraft. (Image: Joby)

Why Dayton? Well while one assumes that the state probably made it an appealing choice, there is also the fact that the first aircraft manufacturing facility, operated by the Wright Brothers, was located in Dayton.

Joby plans to produce up to 500 eVTOLs per year.

And to achieve that capability it will invest up to $500 million in the region.

It is anticipated there will be up to 2,000 jobs created in the area.

Didier Papadopoulous, president of Aircraft OEM at Joby, said, “Later this year we expect to begin subtractive manufacturing”—also known more simply as “machining”—“of titanium and aluminum aircraft parts as we continue to grow our workforce in Dayton.”

Machining components makes this whole undertaking seem more real.

The EV Bump That Won’t Be

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By Gary S. Vasilash

“While technologically advanced, the extent that BEVs can contribute to GDP growth is limited by the maturity of the motor vehicle industry, with passenger car sales having peaked in 2017. This is a restraining factor as BEVs do not represent an innovation that creates new demand, like the introduction of personal computers or cell phones. Instead, they’re a new version of a familiar product whose sales may not grow much beyond current levels.”—Thomas Klitgaard, Federal Reserve Bank of New York

In other words, electric vehicles are not a disruptive tech that is going to bring in new buyers who otherwise wouldn’t buy an SUV, car or truck.

So even if we get to 100% EV buyers (not likely anytime soon), this is simply replacement, not buyers who would otherwise not buy a means of transportation.

Which is not what vehicle manufacturers want to think about.

Kia Going Big

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By Gary S. Vasilash

While some people may continue to associate Kia with small(ish) vehicles—sedans and CUVs—the company has not only transformed itself into a leader when it comes to styling, but it has increased the size of what it has on offer.

An excellent example of this change is its EV9, which is not merely an electric vehicle, but a three-row EV. While you can find three-row crossovers at your local Ford (Explorer) and Chevy (Traverse), you can’t find a model with an electric propulsion system.

(And it is worth noting that the EV9, in its debut year, bested an array of other crossovers to be named the North American Utility Vehicle of the Year by NACTOY, no small feat.)

Kia PV5 in a ride-hailing configuration. (Image: Kia)

But even those who are familiar with the Kia lineup were undoubtedly taken by surprise at this year’s CES when the company introduced its “Platform Beyond Vehicle” (PBV) strategy, which is predicated on purpose-built EVs that are essentially commercial vehicles. (Which explains why it is showing off two of its PBV concepts—the PV5 and the PV7—at the Work Truck Week event that is occurring this week in Indianapolis.)

While commercial vehicles of the configuration of the Kias are common (though the styling of the Kias are uncommon), what’s interesting is that the company is proposing that there is a driver’s fixed cab on a platform and behind it a flat surface upon which upper bodies can be attached, depending on the use case.

Again, putting different boxes on the back of truck chassis is common, but Kia is proposing the “life modules” are attached with hybrid electromagnetic and mechanical coupling such that they can be readily replaced to take on different tasks.

Steve Center, COO and EVP of Kia America, said of the PBV approach: “Kia’s exciting foray into this important segment of the overall industry represents our steadfast commitment to the electrification of transportation and aligns perfectly with our Plan S strategy to become a global leader in sustainable mobility.”

Mobility that goes beyond moving people.

While still concepts, the company says the PV5 could hit the U.S. market in 2026.

Watch this brand.