The automotive industry is at a crossroads: the last few years of record-setting volume is beginning to cool; all the while, car makers are being pressed to spend more money on R&D in order to keep pace with the emerging trend of electrics and autonomous vehicles.
That means for every story you hear about an automaker cutting costs, you hear another about one who is investing strategically in the transformation of the market. And often it’s the same companies who are doing both simultaneously.
Bloomberg is reporting that Hyundai has pledged to spend $40 billion over the next five years in an effort to stay on the cutting edge. A nice chunk of the money is earmarked for the development of driverless cars, electrics and also, says Hyundai, “transportation services” which could mean ride-hailing. According to CNet, the company already has plans to trial an “autonomous robot taxi fleet” in South Korea by 2021.
But it’s electric vehicles that Hyundai seems to be really pushing these days. The company has said it intends to release 44 electric models by 2025 and that, by then, it plans to be in the top three of electric vehicle makes globally. The company says it wants to lead “the paradigm change facing the automotive industry.”
It’s starting with the news that it will launch a new EV in 2020 on a dedicated platform which, CNet points out, would be a big step forward for the company whose current EV models share a chassis with their gasoline-powered inspirations.
So how will the company continue to invest a fortune in R&D and also reach an operating profit margin of 7%, which is another near term goal the company has made public?
Well, Hyundai’s South Korea union boss told Reuters last spring that, since electric vehicles are simpler to manufacture, that the company could slash jobs, and not just a few: Ha Bu-young said that Hyundai could be in a position to eliminate up to 70% of its affected workforce.